Durable goods orders are one of the most watched indicators of economic activity. They comprise such items as automobiles, washers, dryers, furniture, firearms, and toys. Things that are supposed to last for years.
The chart below clearly indicates the downward trend in durable goods orders, and I’m sure that members of the FOMC were well aware of the decline when they voted to lower the fed funds rate .25% today.
President Trump had railed for a “large drop,” and he didn’t get it. So, I’m sure we will hear more from him in the days, weeks, and months ahead. Remember Trump made his billions in real estate, which thrives on low interest rates.
Pundits on the Left may say that the Fed’s .25% cut showed “its independence.” However, the dye has been cast. Lower interest rates are in the future as the economy signals more signs of weakness. And, the Fed ended its QT two months early.
This will be positive for the metals, despite today’s declines. When it becomes obvious that the Fed is going for lower interest rates, gold and silver will rebound. The metals are in a bull market. If concerns about the economy override the Fed’s rate cuts, we may see some really big days to the upside.