Shares of the iShares Silver Trust surged 3.33% to $58.95 on September 17 after silver futures rebounded sharply in the wake of the Federal Reserve's latest 25-basis-point rate hike, raising the federal funds rate and signaling at least one more increase may come before year-end. The move recouped losses from earlier in the week, when SLV slid from $58.12 on September 11 to $57.05 by September 16, and poses a critical question: is this a durable recovery or a reflexive bounce in a tightening cycle that ultimately works against non-yielding assets like silver? Silver Rebounds 3.3% After the Fed's First Rate Hike in Three Years, but Will Hawkish Guidance Cap the Recovery?
Shares of SLV jumped 3.33% to $58.95 on September 17 as silver futures staged a sharp intraday recovery after the Federal Reserve's first interest-rate increase since 2023. The Fed raised rates 25 basis points to a target range of 3.75%–4.00% in a unanimous vote. The bounce came after silver initially sold off on hawkish forward guidance, and it forces a question every SLV holder needs to answer: can a non-yielding metal keep rallying when the central bank says it isn't done tightening?
The Hike Was Expected — the Hawkish Tone Wasn't
Fed Chair Kevin Warsh struck a hawkish tone in his press conference, and the updated dot plot — the chart showing where officials expect rates to go — pushed the median 2026 rate projection to 4.1% from 3.8% in June, signaling one more hike could still come this year.
That combination sent the dollar higher and short-term Treasury yields up sharply, raising the cost of holding assets like silver that pay no interest. The initial selloff was logical; the rebound suggests traders had already positioned for worse.
Silver Opened at Its Lowest Level of the Week — Then Reversed
December silver futures opened at $63.42 — down 2.3% from Wednesday's close — but climbed back to $64.57 by early morning.
Silver prices didn't ultimately change much after the decision, and markets appear to have drawn confidence from both the Fed's move to fight inflation and reports that Saudi Arabia's damaged East-West pipeline would soon resume flows. Easing oil prices relieve one source of inflationary pressure that had helped justify the rate hike in the first place.
The Bigger Picture: A Structural Supply Shortage Persists
The Silver Institute's 2026 World Silver Survey confirms a fifth consecutive annual deficit, with a sixth projected for 2026 near 46.3 million ounces. That physical scarcity underpins the bull case even when monetary policy tightens. J.P. Morgan forecasts silver at $63/oz in Q4 2026, averaging $70/oz for the full year.
SLV's Wild 2026 Puts Today's Move in Perspective
The trust's NAV year-to-date return sits at –13.07% , a reminder that SLV peaked near $109 in late January before correcting violently. Silver topped $113/oz in January and plunged to $77 by February — a 32% drop in weeks. Today's 3.3% pop is meaningful but modest against that backdrop. With the Fed flagging more tightening and the September 30 PCE inflation report looming as the next catalyst, investors should treat this bounce as a reprieve, not a verdict.