Decoding the Fed’s Decision in 5 Charts

By MarketsFOXBusiness

Some say the FOMC choked by leaving interest rates unchanged, near zero, while others say U.S. policymakers are simply trying to err on the side of caution. In the end the global financial markets make the final determination. Here's a look at the results...

1. U.S. Bonds Get a Boost

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Investors loaded up on the safety of U.S. Government debt after the Fed signaled that recent global economic and financial developments are now officially problematic for the U.S. The yield on the 10-Year Treasury fell to 2.13% pushing the value higher.

Speaking Friday on FOX Business Network Dan Heckman, of U.S. Bank Wealth Management, said "make sure you have plenty of bonds." Although he likes government debt he sees more opportunities in municipal bonds.

2. Gold Shines, Silver Takes Center Stage

Gold bugs caught a break from the Federal Reserve this week. Gold jumped nearly 3% to $1,138 an ounce. Longtime gold watcher George Gero of RBC Capital Markets tells the move was constructive but it will take time to get more conviction, which would have prices around the $1,200 level. Silver's 4+% weekly move was even more impressive as it was the biggest since May.

Piling into the safe haven of precious metals was driven in part by Chair Yellen's acknowledgement that "the outlook abroad appears to have become more uncertain of late and heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets." These factors may restrain U.S. economic activity she warned during her Thursday press conference.

3. U.S. Stocks Get Stung By FOMC

While investors bought U.S. bonds and precious metals, they sold U.S. stocks. The Dow Industrials, the S&P 500 and the Nasdaq Composite all finished the week modestly lower. The selling was accompanied by above-average volume. Eleven billion shares traded hands across all U.S. exchanges, higher than the 5-day average of 6 billion.

Early next week trading could be a bit lighter due to the Jewish holiday Yom Kippur - Day of Atonement.

4. Oil's Mixed Trade

Oil has been unloved by traders and investors for over a year now, so the FOMC's decision to keep interest rates as is didn't change the fundamentals. The world is awash with oil. So much so that earlier this week Goldman Sachs (NYSE:GS) warned that crude could fall to $20 a barrel.

WTI Crude saw a modest drop to just under the $45 a barrel level. While Brent, the global benchmark, slid 2% pushing the annual loss to 17%.

5. Euro Kicks King Dollar Temporarily

Looking at the last two days of trading, courtesy of FOX Business Network Senior Editor Charlie Brady, notice that the Dollar Index rebounded sharply Friday to finish back where it was ahead of the decision by the Fed to stand pat on rates. For the week, the dollar still managed to edge out modest gains against the euro pushing the year-to-date advance at 7%.

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