Fed raises rates, unveils cuts to bond holdings in sign of confidence

Shares fell in Asia on Thursday after the U.S. Federal Reserve raised interest rates, as expected.

The shekel-dollar exchange rate has fallen to a new 3-year low (since August 2014) despite the US Federal Reserve's decision yesterday to raise the interest rate by 25 basis points to the 1%-1.25% range. A local expert says the US rate hike could actually help Korea resolve its massive household debt problem, which topped a staggering 1.2-trillion USA dollars in the first quarter. However, the Fed says it would start reducing its holdings of bonds and other securities in this year, which is a sign of its confidence in US economy's growth and strengthening job market.

"The economy is doing well, is showing resilience", Yellen said at a quarterly news conference.

The dollar strengthened slightly after the announcement while United States stock markets took it in their stride, though there was some further unrelated softening of key tech stocks such as Amazon, Facebook and Google.

It seems the Fed is no longer data dependent as before and wants to carry on with the normalization process despite weakness seen in some economic releases.

Not all observers agree though and plenty are sticking with the view that a further Fed rate hike is inevitable later this year.

In a separate report, the department announced that USA import prices declined 0.3 percent in May after increasing 0.2 percent in April, while the price index for US exports declined 0.7 percent in May following a 0.2-percent advance in April.

"Asset sales would be deferred, but their replacement-rate on the balance sheet tapered increasingly every three months". She said that no action was taken during this meeting, as the FOMC members wanted to provide advance warning before taking such a step.

Stupnytska added that while the Fed would be "under little pressure to tighten policy in the next few months" ultimately the tightening effect could come from the balance sheet reinvestment programme. This is thought to tighten financial conditions, providing the Fed with less scope for rate hikes in 2018.

"I think it was all expected, the U.S. economy is doing pretty good, we're pretty close to full employment and inflation is pretty close to the target".

Related Articles

  • Jose Mourinho accused of tax fraud in Spain

    Facebook/CristianoRonaldo has expressed his desire to transfer back to Manchester United . It will be up to a judge to decide whether to take Mourinho to court.

    Cindy, now a tropical depression, moving inland

    Storms will be possible Sunday afternoon, especially across south Alabama , but coverage will be scattered in nature. Rain chances will increase this weekend across North Texas but it has nothing to do with Tropical Storm Cindy .

    Trump disputes Russian interference in 2016 election

    Trump then denounced the issue of Russian hacking as a Democratic "scam". "But, I have no doubt that it will continue", he said . Ryabkov also criticized the US for "not having offered and not offering anything specific" to discuss at the upcoming talks.
  • 'Transformers' tops box office but is biggest in China

    And don't forget to look for the latest article each week to see what else will be playing at the movies. "And he could do it". What's odd here is the fact that the first Transformers film was mediocre, and they've gone downhill since then.

    Bruno Mars to Open the 2017 BET Awards in Los Angeles

    This year's show is jam packed with announced performers including Mary J.Blige, DJ Khaled , A$AP Rocky, Gucci Mane and Xscape. NIGERIAN artistes have dominated African acts at this year's BET Awards scheduled to hold on June 27 in the United States .
    Obama slams new Republican healthcare bill

    Obama slams new Republican healthcare bill

    Menendez held a news conference at Newark Community Health Centers where 53 percent of patients are on Medicaid. The long-awaited plan marks a big step toward achieving one of the Republican Party's major goals.
  • Brazil leader defiant in face of possible charges

    Brazil leader defiant in face of possible charges

    Temer has denied wrongdoing and said he refuses to resign despite numerous calls for him to do so and plunging popularity. Brazilian President Michel Temer has been charged with accepting bribes by the country's chief prosecutor.

    Devils on the clock with No. 1 pick in NHL draft

    Vegas emerged from the expansion draft with 15 defensemen, and McPhee alluded before the expansion draft to trading some of them. Tolvanen is an undersized 18-year-old phenom from Finland with some of the most spectacular offensive skills in the draft class.

    Tennessee homeowner holds escaped Georgia prison inmates at gunpoint until authorities arrive

    Veteran correctional officers Christopher Monica , 42, and Curtis Billue , 58, were killed near Eatonton, Ga., around 6:45 a.m. This homeowner and his neighbor held the two suspects until authorities arrived and were able to successfully capture them.
  • South Africa hold off Pakistan at ICC Women's World Cup

    South Africa hold off Pakistan at ICC Women's World Cup

    Only reigning world champions Australia had previously made a success of chasing a bigger target in a women's one-day worldwide . We know Pakistan is a really fearless team, we know they will bring their A game.
    Google to stop scanning Gmail messages for targeted advertising

    Google to stop scanning Gmail messages for targeted advertising

    Google used email scanning in the past to find possible links to fraudulent websites in emails and to filter spam messages. While Google didn't say when it will stop the Gmail scanning, it did say that it will continue to display targeted ads.
    Hatch lauds president's executive order to expand apprenticeships

    Hatch lauds president's executive order to expand apprenticeships

    Fewer than 50,000 people including 11,104 in the military-completed their apprenticeships in 2016, according to Labor Department . The apprenticeship expansion is being rolled out as part of what the White House has dubbed " workforce development week ".