US interest rates rise by 0.25%

Jan 15, 2016 | Tony Byrne's View

The US Federal Reserve has made the decision to raise interest rates by 0.25%, the first rise since 2006. This move is set to strengthen the Dollar and, as this is a more common currency for trading, the change in exchange rates could see people trying to take advantage of the situation, or at least avoid any negative implications. The rise in interest rates is likely to have effects across the entire international market place, with this show of confidence in the American economy boosting Eastern and Western economies in turn, and making it more probable that others will follow their lead. Whilst the Bank of England voted this month to keep our interest rates at 0.5% until late 2016 or early 2017, this move could put more pressure on the UK to bring a rise forward to match the upward movements of the US. As the USA and UK agree that any interest rate rises should be gradual, we will not see a large increase any time soon, but we should be prepared for a slow climb to the desired 2-3% by 2018.

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