For the first time in nearly a decade, the Fed opted for a lift-off last week indicating that the economy has gained enough strength to bear future increases in borrowing costs. Significant improvements in the key sections of the economy including that in the labor market were the main reasons behind the hike. Expressing confidence in the U.S. economy, Fed Chair Janet Yellen announced the beginning of a slow-but-steady series of rate increases.
The Fed increased its short-term borrowing rate to a range of 0.25% to 0.50% as policy makers unanimously voted in favor of a hike. The long wait for the hike was what Janet Yellen labelled an “extraordinary period.” During this period, ultra-low interest rates aided economic recovery, lending a bull run to the markets (read: Fed Finally Hikes Rates: Quality ETFs & Stocks to Buy Now).
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