The Fed's interest rate decision was highly expected this week. The U.S. dollar was supported by the Fed's interest rate hike. The Fed on Wednesday raised its interest rate to the range 0.25% - 0.50% from 0.00% - 0.25% as widely expected by analysts. All Federal Open Market Committee (FOMC) members voted for the interest rate hike. The Fed repeated that further interest rate hikes will be gradual.
The impact of the Fed's interest rate hike on the U.S. dollar was moderate.
Market participants will focus on further interest rates now. The Fed expects its fed-funds rate to be 1.375% by the end of 2016, 2.375% by the end of 2017, and 3.25% by the end of 2018. That means that the Fed plans to raise its interest rate four times next year. If the Fed reaches its target, it is written in the stars. The U.S. manufacturing sector remains weak and inflation remains low.
It needs time to see which effect the Fed's interest rate hike will have. Commercial banks will raise its lending rates. Some borrowers may face problems with higher lending rates.
Financial markets are likely to volatile in the days of the year, due to lower liquidity. Stock markets are likely to be focussed on oil prices, while the foreign exchange market is likely to be driven by speculation on further interest rate hikes by the Fed.
© 2000-2022. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at firstname.lastname@example.org.