Global markets are wobbling with the news from the Fed’s yesterday meeting. The new interest rates and the possibility of few more coming made this Thursday’s trading unpredictable.
Today Asian currencies and shares eased down. This situation was provoked by the Fed’s decision to raise the interest rates in the USA the first time in a year. And this decision made its influence on the market faster than anyone could predict.
As for the American yields on the short period, debt went to its highest peak since the 2009 year. Dollar began its race with the speed unseen before, and almost reaching the highest in 14 years numbers. This situation has sent Chinese yuan to its lowest since the 2008 crisis.
With the new interest rates and great expectations for the presidency of Donald Trump, capital is going back to the assets tightly connected with dollar. Chinese economists believe it will create a new problem, with the investors leaving their region and focusing on the Wall Street trades.
Fed raised the rates in 0.5-0.75 percent at 25 basis points. Investors felt a little bit confused when Fed’s members announced that they are ready to raise the rates three times next week. They expected to receive only two hikes.
Hiroko Iwaki, one of the main strategists in Mizuho Securities, believes that markets across the world were all surprised by this decision of Fed. He predicted that there will be a huge wave of bonds sell-off, while the bond yields are rising.