As expected and reported on the blog last week, Fed Chair Janet Yellen and her team raised the Fed’s key interest rate by 0.25 percentage point today. While it’s the third time that the Fed has increased rates since the financial crisis, the US economy is on the move, and now, so are interest rates.
Yellen, in her remarks at the press conference today said that “[t]he simple message is the economy is doing well. We have confidence in the robustness of the economy and its resilience to shocks.”
The Fed’s confidence level appears to be strong, at least in the US economy. The Fed appears to not be overly concerned given some of the tension in foreign markets. Just two days ago, the UK Parliament authorized PM Theresa May to move forward with BREXIT. In the Netherlands, Geert Wilders Freedom Party has until recently, gained traction in seeking to have the Netherlands start a movement toward NEXIT – fortunately, if you favor the EU, Conservative Dutch Prime Minister Mark Rutte’s party appears to have beaten back Wilders and moved into the lead. Many see the Netherlands election as an indicator of populist sentiment in Europe. Who’s next? In any event, none of that has affected the US stock markets which surged after Yellen’s remarks. The Dow rose 112 points on the day with the NASDAQ moving up 43 points.