American central bank insinuates an interest rate… | BNT Diamonds
Interest rate American central bank

American central bank insinuates an interest rate increase

16 Jul 21

As expected the Federal Reserve (Fed) decided to continue its zero interest rate policy. However the grand question was if the central bank would give a hint about the chances of an interest rate increase in December. The Fed keeps all options open but clearly implies that as of December 16th a stricter monetary policy will be more likely.


The higher chance of an interest rate increase before the end of this year gave the dollar a boost. Thereby the euro decreased over one and a half cents to 1.092 dollar. A stronger dollar and higher rates are bad news for investing in gold. De gold price decreased 2 percent to 1.157 dollar per ounce. Investing in diamond is less subject to these fluctuations.

Most economists believe the Fed’s message and expect that the American central bank will increase the rate for the first time in nine years in December. However the interest rate futures market is not convinced yet. According to the futures market, the chance of an interest rate increase in December has only increased to 46 percent, compared to 35 percent before that.

The American stock markets responded unsteadily. Immediately after publication of the interest rate decision they had to abandon their profits, but quickly recovered.

Stock investors are apparently convinced that the central bankers believe in a durable recovery of the American economy. The atmosphere on the bonds market was less positive. The American long-term interest rate, which had already increased before the Fed’s decision, continued on that trend.

Fabienne Rauw
About Fabienne Rauw
BNT Diamonds Antwerp

Fabienne, manager of the German market is able to guide every client with finding the right jewel. She takes care of most of the German orders, but also takes other task on her plate. Thanks to her six years of experience at BNT Diamonds she acquainted well with the product and the marketing around it. Her degree in PR ensures that BNT Diamonds is well presented across all media channels. For anyone looking into a new investment opportunity, Fabienne is the perfect guide in this process. No question will be left unanswered, and she will help you every step of the way.

With this article, BNT Diamonds strives to inform you thoroughly about investing in diamonds. No investment can be guaranteed to be without risk or fully according to your expectations. That is why we recommend to research the risks and aspects of investing in diamond properly to ensure that you make the right choice for your portfolio.