Fed leaves rates unchanged but hints a raise before year end

The Federal Reserve left the rates unchanged in yesterday's FOMC meeting. However, a rate increase is most likely to happen before year end, as Chair Yellen said that the case for a rate hike "has strengthened".

Three out of ten of the rate-setters voted against the decision to leave rates unchanged and called for a September increase. According to the words of Chair Yellen, the Fed needs to wait for "further evidence of progress towards its objectives" before taking the decision to hike.

Market participants did not expect a rate raise and they didn't get one so the market environment didn't change much. The US dollar lost less than a percent against its major competitors and that appears to be normal. However, the pressure is building and if Fed wants to ease off a bit and create a calm market environment for next year, they need to move in December.