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Daily Alert: Fed delivers on expectations, first rate hike to be delivered in March

  • The first read on the just-released FOMC Statement is that it was bang on market expectations. Market reaction has hence been very limited.
  • The Fed kept the Fed Funds rate at 0-0.25% but strongly signalled a hike at the next (March) meeting. This was already well priced by markets prior to the meeting.
  • Markets were feeling a little more perky prior to the FOMC meeting. Stock indices on both sides of the Atlantic enjoyed a solid bounce (Eurostoxx 50 +2.1%) and indicators of risk aversion like the VIX index eased off a bit.

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