Interest rates have lingered at historic lows since the recession, and have only hiked them twice since 2008.
A drop in unemployment, more people seeking jobs and a rebound in wage growth were other upbeat aspects of the report which economists at these top banks reckoned give the Fed a green light to raise rates by a quarter point to 0.75-1.00 percent. The statement added that the Fed expected still-low interest rates to lead to a "sustained" return to 2% inflation. The median five-year rate available in the market is 5.87 per cent. One-year rates are still available below 5 per cent.
In a statement, members of the Federal Open Market Committee projected the rate to be 1.4 percent at the end of this year, 2.1 percent at the end of 2018 and 3 percent at the end of 2019, as the economy and inflation hit the Fed's targets.
The Australian and New Zealand dollars were sidelined on Friday, but were on track for large weekly gains as the greenback lost steam after the Federal Reserve indicated it was unlikely to speed up monetary tightening.
US Fed raises interest rates for third time
Last year, the central bank flagged its plans to raise short-term interest rates more aggressively throughout 2017. But, a strong correlation is seen after a week of US Fed meeting, Reuters said in a report.
A Global News analysis noted that the impact of the hike should be seen through the lens of Canada's key interest rate, which has remained static at 0.5 per cent since July 2015.
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As widely predicted, Janet Yellen announced that the Federal Reserve was raising its main interest rate by a further 0.25% increment.
Occidental Petroleum rose 1.7 percent. They added that they expect economic activity will expand at a moderate pace, and inflation should settle around 2 percent in the medium term. We also couldn't confirm the views of Daniel Tarullo, who has recently resigned and this is his last rate decision meeting.
The rate is still low compared to the historical level, and reflects a still-accommodative monetary policy.
Taiwan's exports for February soared 27.7 percent from a year earlier to US$22.66 billion, recording year-on-year growth for the fifth consecutive month. All we can say, looking at the U.S. experience, is that expectations can change quickly, depending on the economic data. The federal funds rate is a specific interest rate that dictates the interest rate charged on funds borrowed overnight by major financial institutions. "What's on offer at the moment - in time it's likely to be a lot higher".
Because gold is not yield-producing and investors have to rely on price appreciation for returns, the metal has a strong inverse correlation to U.S. government bond yields which slumped on the news.