Fed Finally Gives Market Its Dovish Rate Hike

Dec. 16, 2015 marks the first Fed rate hike in nearly 10 years.
Fed Finally Gives Market Its Dovish Rate Hike
Fed Chair Janet Yellen holds a news conference where she announced the Fed will raise its benchmark interest rate for the first time since 2006 on Dec. 16, 2015 in Washington, D.C. Chip Somodevilla/Getty Images
Rahul Vaidyanath
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Dec. 16, 2015 marks the first Fed rate hike in nearly 10 years. It’s also been seven years since the U.S. central bank cut the fed funds target to the 0 to 0.25 percent range.

Labor market improvement in 2015, which the Fed describes as “considerable,” is the key factor behind the move, as the other half of the Fed mandate—inflation—remains well below target.

Financial markets were expecting a dovish rate hike. While that term may sound like an oxymoron, the Fed’s dot plot—Fed members’ projections for the mid-point of the federal funds target range—was expected to be slightly lower than September’s.

Monetary policy remains accommodative.
— Janet Yellen, Chair, Federal Reserve
Rahul Vaidyanath
Rahul Vaidyanath
Journalist
Rahul Vaidyanath is a journalist with The Epoch Times in Ottawa. His areas of expertise include the economy, financial markets, China, and national defence and security. He has worked for the Bank of Canada, Canada Mortgage and Housing Corp., and investment banks in Toronto, New York, and Los Angeles.
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