Bonds Bouncing After Yellen’s Last Meeting

James BarrettGeneral Commentary

Bonds have a nice bounce higher this afternoon after the Fed raised rates as expected by everyone . The dovish tone to the post meeting release was the key to bringing in buying driving the market up and re-triggering the flattening yield curve  trend. The Open market Committee’s growth forecast was increased but very importantly their inflation expectations stayed the same.

This news also brought a bid into gold at long last after a recent rout of over 60 dollars. Things had been so bad for the precious metals that today’s Barron’s ran an article referring to Gold as the poor man’s Bit coin. Talk about a tongue in cheek insult . So for gold traders it  was nice to see the old store of value standard get off the floor and move higher.  Will this afternoons trading moves have legs?  My guess is the flattening yield curve will but jury remains out on the absolute price levels. The Notes and bonds are still caught in the  recent trading range and unless the stock market corrects it’ll be hard to move substantially higher. The same for gold as resistance will be tough to overcome  around 1267.