The US Federal Reserve raised interest rates on Wednesday, marking the first time the Reserve has raised rates since 2006. Fed Chair Yellen took the historic step after her predecessor, Ben Bernanke, lowered rates to 0% during the depths of the 2008 global financial crisis.
Jesse Cohen, Senior Editor at Investing.com commented: “Yellen finally delivered. There weren’t too many surprises in the FOMC statement, as policymakers did a good job in recent weeks communicating the message that future rate hikes will be gradual. As expected, Yellen sounded more on the dovish side in her press conference, pledging to be patient and cautious with future rate hikes.
“I think we’ll likely see a ‘sell-the-news’ knee-jerk reaction in the currency market following the Fed’s decision. The U.S. dollar will be susceptible to some downside pressure following strong gains leading up to the Fed as investors ‘buy the rumor, sell the fact’.
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“In equity markets, however, I expect global stocks to rally through until the end of the year and into 2016, led higher by Wall Street, as traders view the rate hike as a vote of confidence in the economy, which should bode well for corporate earnings expectations.”
