The Fed has raised rates for the first time in nine years – RBC

The building of the US Federal Reserve

Photo: REUTERS 2015

The Committee on Open Market (FOMC) of the Federal Reserve decided to raise the key rate by 0.25 percentage points This is stated in the report released after a two-day meeting of the Committee report. The key rate is at a historic minimum level – in the range from 0-0.25% – since December 2008. After raising the rate will fluctuate in the range of 0,25-0,5%

The Fed chief Janet Yellen did not rule out a rate increase during the year. The reason for this was the recovery of the US economy. The unemployment rate for the last – in December – to the Bureau of Labor Statistics is at around 5%, which is almost the same as “full employment.” The rate of inflation has not yet reached the target of 2%, which is expected to achieve the Fed.

Another sign that the rate hike will happen on Wednesday, began scheduled for 2.30 on the New York (22.30 GMT) press conference Yellen. In July, after a meeting of the FOMC, which could be taken decision to raise rates, communication with journalists were planned.

On the eve of the experts surveyed by Bloomberg and market participants almost unanimously believed that the Fed decides to raise the cost of borrowing.

The Committee decided unanimously to raise the rate. According to Bloomberg, the rhetoric posts FOMC is constructed in such a way that does not rule out further rate hikes. “The Committee suggests that the economic situation will develop in a way that would require only a gradual increase in rates,” – the document says. “The rate hike will depend on the economic outlook,” – said the FOMC. The risks for the economy and inflation, FOMC considered “balanced».

The Fed believes that the unemployment rate from 2016 to 2018 will amount to 4.7%. The US economy in 2016 will grow by 2.4% and in 2017 – by 2,2%.

The decision on the rate increase is a compromise between “doves” and “hawks” – supporters of soft and hard monetary policy, respectively, writes Reuters. The key rate has been raised, however, the Fed is likely to refuse to cyclical growth. Further monetary action the Federal Reserve will be determined by economic conditions.

Imperceptible increase

The stock markets barely reacted to the hike. US stock index S & amp; P fell throughout the day, then rose almost to the level prior to the opening decision, but immediately after it fell sharply to the lowest of the day (-0.7%). After that, he became again increase.

Brent oil per day decreased by 3.3% to $ 37.18 per barrel, but in the very application to change rates, oil prices hardly reacted.

Head of Analysis Markets “Opening Broker” Konstantin Bushuyev has confirmed that the market lay in the Fed rate hike, though for a long time. After the October meeting of the Fed, market participants suggested 75%, which rate will be in December increased and after Dec. 2 reiterated by [a speech on the economic prospects of the United States - RBC] Fed Chairman Janet Yellen, the probability of increase is even greater, said the expert. He believes that the ruble rate increases the Fed is almost no impact.

Senior portfolio manager GHP Group Fedor Bizikov told RBC that “to carry on the Fed has actually been nowhere, so expect strong movements in the bond market is not necessary “. He added that a mild comment from the US regulator “may finally bring down volatility in the debt markets in developing countries.”