Fed increases interest by 25 basis points after the FOMC meeting. Also, Fed management forecasts there are two more interest increase during the year of 2017. Thus, Fed has raised interest for the third time since June 2006. The Fed's first interest rate increase since June 2006 was in December 2015, and the second interest rate increase was in the FOMC meetings in December 2016. Nearly all of the investors were expecting an interest rate increase of 25 basis points, along with Fed officials, including Fed Chairman Janet Yellen, who sent out unusually clear signals.
The Fed's federal funding rate for December 2017 stayed as the same at the 1.4 % level.President Yellen has held a press conference after interest rate decision. Yellen also noted that the increase in interest rates indicates that the economy is making progress, but does not reflect the change in economic outlook. The Fed also noted that economic forecasts have changed little since December. Finally, when we look at the first effects of Fed interest increase decision, the Dollar index started to decrease strongly in the first hours after the decision. US stocks continued their gains as the Fed signaled that the benchmark interest rate would increase by 25 basis points as expected and that this year's total would increase to three interest rate.
- Date: 15 March 2017 Wed 21:23
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