World Banks React to Fed Rate Hike

Central banks in Europe, Japan and Taiwan adjusted monetary policy off the back of the Federal Reserve raising rates last month - but the UK policy remained unchanged for now

Andy Brunner 6 January, 2016 | 8:12AM

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The Fed met market expectations at its December 16 Federal Open Market Committee meeting raising rates for the first time in nine years. The 25 basis points rise to a new band of 0.25-0.50% and a generally cautious statement were broadly welcomed by financial markets. The Fed’s expected future path of tightening for next year remained unchanged at 100 basis points but, with officials remaining concerned about weak inflationary trends, the trajectory was lowered slightly for thereafter. Most commentators expect three to four hikes in 2016.

Most commentators expect 3 to 4 interest rate hikes this year

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About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

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