FOMC Raises Rates the Most in 28 Years

This afternoon, the FOMC raised rates by .75%, the largest hike in 28 years. Just a week ago, market participants were factoring in a half-point hike, which might explain the bashing miners metals and miners have experienced recently. Now that we are exactly three months into this hiking cycle, we should start to hear calls for a pause, or even a reversal to lower rates, both of which should start the metals bull running again. We are already getting headlines of weakness in the economy, in fact I think without the higher prices from inflation, the business conditions wouldn’t look nearly as good as they do now. It’s hard to tell if the decoupling of the stock market from the miners will stick, but we have recently been seeing this occur more often. Once the market catches on that there is no other place to hide, even bonds have tuned lower after a 40 year bull market, we will see the metals and miners ignite to the upside. Until then, we have to be patient.

I took advantage of an afternoon pullback to add to FSM, while continuing to sell out of some more junior explorers for the time being. I will try to gauge when their time to fly comes around again, but with liquidity shrinking and things getting clobbered across many asset groups, I prefer to use the proceeds to acquire more mid-cap producers. With that in mind, I sold some more MGMLF and STKXF, fully cashing out of the latter. I have order in to add to the names mentioned over the last few days, and for those that aren’t comfortable with the risk involved holding individual miners, the etfs GDXJ and SILJ are always great options. I will continue adding to both.