The Most Over-Hyped Federal Reserve Bank Decision Ever

In the next hour, the Federal Reserve Bank is expected to announce a modest rise in interest rates. In addition, dovish commentary from the Bank is expected, stating that this rate hike is warranted based on the anticipated strength in the economy, to combat future inflation and that any future rate hikes will be data dependent. Now that we have all the have information beforehand, what is going to happen in the financial markets. At this time, the indexes are flat after erasing most of Friday's steep decline on Monday and Tuesday. Crude Oil is continuing to spiral down, which was once the primary component on which inflation was gauged. Nervous nellie's are piling into the Gold market in anticipation of whatever the Fed does is going to create uncertainty,which typically has been for Gold/ Traditionally, higher interest rate have been an overall negative for the market. As interest rates rise, stocks and bonds become less attractive investments as interest rate bearing investments become more attractive. However, in this current environment it would take a major rise in rates to match the returns of higher yielding dividend stocks or funds. Surely, this could never could happen without the economy grinding to a halt. So what can we expect following the announcement? Extreme volatility. With the absence of bona-fide market makers to cushion the impact of the move, high frequency firms will withdraw the quotes from the futures and equities markets and wait to feast on any order that comes into the market place. When there is uncalculated risk or uncertainty, they simply fold up shop to avoid any unnecessary losses. Only to return when there are retail or institutional orders to prey on. So how should the average investor view this momentous event, from the sidelines. Perhaps waiting a day or two to observe the price action and determine if anything has really changed. If so, how have they changed and what necessary adjustments should be made to their portfolio. Although the market may fluctuate wildly in the next few hours. there will be plenty of rip-roaring rallies to sell into if liquidation of lighting of the portfolio is warranted. On the other hand, if the long-standing bull market is to continue, there will be frightening dips to increase one's exposure to the equity markets. Sit back relax and the enjoy the fireworks. Who knows, in a few days the markets may just be in the exact sare area as they are now. And that is after the most anticipated Federal Reserve Bank decision ever. .