The Fed decision is what I expected to happen this year. In January I wrote:
"QE is dollar positive, gold negative because of the financing of the US debt. Foreign countries are reducing their purchases of US treasuries and the only solution for the FED is to increase interest rates in order to attract more borrowers." and this "JUST A NOTE ABOUT HIGHER INTEREST RATES: This could explain why the congress passed a bill removing the ceiling -400 billions- allocated to Fannie and Freddie for rescuing the housing market. There is no maximum anymore (117 billions of the 400 have been used so far) and the new decision can only be explained by the knowledge that interest rates are going to go up killing the housing market for good (expect a minimum of 2% increase in rates in 2010)"

SO: Here we are.The propaganda will tell you it is because of the financial stability, the economy is recovering, "normalization" of lending to encourage banks to borrow from the private sector...The gurus and experts jump on the occasion to give their truth (Please remember this "guru" called SOROS!!!) and according to Kathy Lien, director of currency research at GFT Forex. "Although the Fed went out of their way to say that this does not equate to a change in their monetary policy outlook, action speaks louder than words," and she adds in a note: "The most important takeaway is that the Fed is beginning to implement an exit strategy which is more than what many of the other central banks are doing and therefore this action will be extremely positive for the dollar.".
The only "wise" comment I found was from Sung Won Sohn, former chief economist at Wells Fargo & Co. and now an economics professor at California State University-Channel Islands in Camarillo, California. “The bottom line is the Fed is signaling that in the future rates are more likely to go up, rather than stay stable or go down.” THIS I agree and this: ""The Fed can talk all day about how the discount rate hike is technical and not a policy move, but the market sees it as a shot across the bow," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.

So, the FED wants more "inter-banks" relations and to withdraw some monetary stimulus (a minimum of 1 Trillion dollars). He wants banks to borrow from the private sector, but WHY? to lend more? Funny story just off the press from Fedfairyland! Just yesterday, the headlines from Telegraph.co.uk was saying:
" US BANK LENDING FALLS AT FASTEST RATE IN HISTORY" followed by this comment:
"Bank lending in the US has contracted so far this year at the fastest rate in recorded history, raising concerns that the Federal Reserve may have jumped the gun by withdrawing emergency stimulus."
http://www.telegraph.co.uk/finance/economics/7259323/US-bank-lending-falls-at-fastest-rate-in-history.html?utm_source=tmg&utm_medium=TD_US&utm_campaign=finance1802pm

SO YES: "the bottom line is..." the Fed has to increase the rates. No choice and this is just the beginning. It is not done for the "technical|" reasons given by the Fed but because they would have to increase rates in order to attract foreign money and a lot more than that.

What to expect for the dollar and gold? As explaibed here many times: First reaction is dollar going up (and it did) and then gold going up when the market understands what is going on. I would add (because I do not believe in this kind of coincidence) that the IMF and discount rate increase announcements are part of the plan to try to kill gold, because gold is seen as the "canary in the mine" and they do not want you to see what is going on.
As Jim Sinclair said on his site: "stay the course"

Hubert