by Enough talk already. The moment is finally here: The Federal Reserve raised interest rates today by 0.25 percent for the first time since June 2006. Credit Suisse doesn’t believe the small, well-anticipated hike will hurt the U.S. economy in and of itself. (What happens in rate-sensitive markets, especially high-yield bonds, is another story, and one that The Financialist will cover in the coming days.) More important to financial markets are the signals Federal Reserve Chair Janet Yellen sent about what happens next. Both the Federal Open Market Committee statement and Yellen’s press conference struck a balanced tone – neither particularly dovish nor hawkish. The committee said future hikes would be gradual and that interest rates would remain low for some time, but the vote to raise rates was unanimous and the language of the statement was “unapologetic,” Credit Suisse Fed analyst Dana Saporta wrote in a note released after the decision. Credit Suisse believes the Federal Reserve will raise interest rates by 0.25 percent three more times in 2016, which is broadly consistent with the FOMC members’ own projections for the path of the fed funds rate in 2016. Stay tuned to The Financialist this week for more coverage of the Federal Reserve’s historic move.
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FinancialistStaff considers the following as important: Credit Suisse, Federal Reserve, Interest rates, Janet Yellen, rate hike, World Affairs: Features
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Enough talk already. The moment is finally here: The Federal Reserve raised interest rates today by 0.25 percent for the first time since June 2006. Credit Suisse doesn’t believe the small, well-anticipated hike will hurt the U.S. economy in and of itself. (What happens in rate-sensitive markets, especially high-yield bonds, is another story, and one that The Financialist will cover in the coming days.) More important to financial markets are the signals Federal Reserve Chair Janet Yellen sent about what happens next. Both the Federal Open Market Committee statement and Yellen’s press conference struck a balanced tone – neither particularly dovish nor hawkish. The committee said future hikes would be gradual and that interest rates would remain low for some time, but the vote to raise rates was unanimous and the language of the statement was “unapologetic,” Credit Suisse Fed analyst Dana Saporta wrote in a note released after the decision. Credit Suisse believes the Federal Reserve will raise interest rates by 0.25 percent three more times in 2016, which is broadly consistent with the FOMC members’ own projections for the path of the fed funds rate in 2016.
Stay tuned to The Financialist this week for more coverage of the Federal Reserve’s historic move.