Rates Rise, but not Rapidly

For the eighth and final time this year, today is Fed Day.  And for the first time since April 2006, the Fed raised rates today by 0.25%.  It’s the first time since October 2009 that they have even touched them–well, directly that is.  The Fed can only regulate their Fed Funds Index, which up until two hours ago had been at zero for the last seven years.  Other than that, the Federal Open Market Committee ordinarily relies on hints and pointed observations to sway investor capital in and out of investments that drive interest rates on the longer-term loans. They of course also buy and sell billions of dollars worth of various debts every month to regulate the flow of money.

In her prepared statement this afternoon, Janet Yellen said that the Fed will remain accommodative, and reiterated their plan for a “gradual rise” in rates.  Stocks are up about 1.5%, and Bonds are flat after the well-anticipated announcement.