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| By Jordan Chussler |
This week, the Federal Reserve raised its benchmark federal funds rate by another 25 basis points, extending its record stretch of interest rate hikes to a target range of 5%–5.25%, the highest level since 2007 and up from nearly zero early last year.
However, there is speculation that this could be the last in a series of Fed rate hikes. After this week’s Federal Open Market Committee meeting, the group omitted a line from its previous statement in March that said it “anticipates that some additional policy firming may be appropriate.”
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Still, even with a potential pause to the Fed’s aggressive hikes alongside cooling inflation, headwinds remain for the economy and the markets.
Specifically, the showdown between Democrats and Republicans over the U.S. federal debt ceiling, which could be breached as early as this summer, presents challenges for investors looking to position themselves.
The market, having been rangebound since November, could breakout once the two parties come to an agreement.
However, until clarity on the debt ceiling is established, investors should tread carefully, as we learned this week with the ongoing banking crisis’ latest victim, First Republic, and potentially its next, PacWest, whose shares are down 91.25% from its year-to-date high.
That’s one reason Senior Analyst Sean Brodrick recommends you prepare accordingly and look to certain assets that can hedge against ongoing volatility until the market decides which direction it will turn.
As Congress prepares for a standoff over whether or not to raise the federal government’s debt limit, the result could have an adverse effect on precious metals and, according to Sean, this one ETF in particular.
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Until next time,
Jordan Chussler
Managing Editor
Weiss Ratings Daily
