The FED raises interest rate by 0.25%.

After 7 years of near zero interest rate, the Fed raises interest rate by 0.25% from 0.25% to 0.5%.

Reasons given for raising interest rate today are:

• GDP growing at 2% to 2.5% sustainably for some time.
• Employment has dropped from 10% to 5%.
• Inflation is still below the 2% target at 1.3%, but the Fed wants to be ahead of the curve.

To understand the action of the Fed better, watch this very instructive video on the yield curve.


What is a yield curve?
https://youtu.be/mXiwY_e4nC0?list=PLD3EB06EC4A19BFB8


For those who wish to understand the Fed better, watch this video.

What is the FED?
https://youtu.be/2QGqXeDOkIU?list=PLECECA66C0CE68B1E


US economy has improved.  Consumer spending, autocar buying and housing sector activities are up.  Wages have not risen much so far.



Read also this very good post:
http://unclezmalaysia.blogspot.my/2015/12/300pm-ny-time-wednesday-16-december-2015.html#comment-form