Fed Raises Interest Rates

Dear Traders,

The Federal increased interest rates on Wednesday by a 0.25% point and signaled that the central bank is likely to raise rates twice more in 2018.

Following the two-day policy meeting, it was announced that the economy continues to strengthen and the Fed expects to increase rates twice more this year as it targets a return to more normal interest rate levels as it was stated that “the economic outlook has strengthened in recent months.”

Powell, the new Fed chairman, expressed optimism about the economic picture and said officials were trying to strike a balance between raising rates too slowly or too quickly by targeting the "middle ground". The announcement underlines the Fed's confidence in the economy as well as its focus on the potential for inflation by increasing estimates for economic growth this year to 2.7 percent, up from 2.5 percent in December.

As this rate increases was well expected, it had already been priced in to the market, however speculation leading up to the announcement had suggested that the central bank would increase the interest rate four time this year, therefore the failure to indicate a fourth interest rate lead to a sharp recovery in many majors vs. the USD as well as sharp drops in US stocks.

The Fed's views have disappointed with the suggestion that 2018 will be targeted for normalization, with 2019 and 2020 projections raised, and with the impending risk of a trade war with global powerhouses, the markets have been left shaky with some experts claiming that the dollar needs a big surprise to be pushed higher. Therefore the general feeling is that the markets will be looking to upcoming date from different economic regions as crucial for the currency markets.


Best regards,

David Bergman
Yadix Support Team
Yadix Forex Broker
Telephone: +44(0) 20 3239 6117
E-mail: support@yadix.com
Skype: yadix.forex