The international financial community has been waiting for this event for months. The thing is that the Fed eventually raised the key interest rate yesterday. The central bank decided to increase the rate by 0,25% up to 0,5%. For those of you who don’t know, the last time he Fed raised the interest rates was 2006, a couple of years before the global financial crisis.
Given the mentioned event, international experts predict major changes in the global financial and economic arena. The news allowed Dow Jones to gain 0,5% within several hours after the Fed announced the decision.
Masterforex-V Academy experts say that the Fed’s decision to raise the interest rates testify to the central bank’s confidence that the American economy has completely recovered from the consequences of the global financial crisis seen in 2008-2009. There recent figures coming from the U.S. labor market confirm just that. At least, the current rate of unemployment is at the record low level of 5%. Still, the rate of inflation hasn’t hit the 2% target set by the Fed. However, the central bankers expect the target to be reached over the mid-term. As for the interest rate hikes, the Fed explains that this is a natural outcome given the fact that American household have increased their spending amid growing investments. At the same time, inflation has shown almost no growth until now.
Masterforex-V Academy reminds you that the Federal Reserve released its interest rate decision yesterday, on December 16, 2015, along with publishing another report on U.S. oil inventories, which reached the highest level since 1930. This triggered another oil price crash. WTI oil instantly lost almost 5% of its value. Brent followed with a 3% drop in a matter of minutes.
At the same time, you should keep I mind that the interest rate hike is going to make the U.S. Dollar even stronger against other currencies. Experts say that after the interest rate hike, oil prices will experience even stronger downward pressure over the long term.
