US Market Close 17 Dec: US markets liked the lift in rates. FED funds now at 0.25 - 0.5%

2015-12-17

The US Federal Reserve Open Market Committee raised the federal funds target rate to 0.25%-0.50% in a unanimous decision. "The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective." The FOMC statement was more dovish than markets expected and will be data dependant. "The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in ...

The US Federal Reserve Open Market Committee raised the federal funds target rate to 0.25%-0.50% in a unanimous decision. "The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective." The FOMC statement was more dovish than markets expected and will be data dependant. "The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate."

* US sharemarkets rallied on Wednesday supported by the Fed statement which suggested any further rate hikes will be gradual. Home building stocks rose following the upbeat housing data. The S&P home building index lifted by 2.3%. At the close of trade the Dow Jones index was up 224 points or 1.3% with the S&P 500 up 1.5% while the Nasdaq gained 76 points or 1.5%.

Comments (3)