FED Raises Rates For The Second Time in a Decade

The FED decision was a unanimous "Yes" on a rate hike with 0.25 basis points. The notion, according to FED Chair Janet Yellen was that the economy has made considerable progress towards maximum employment and price stability. Over the past year, the US economy has produced 2.5 million net new jobs and inflation is moving towards the 2% goal.

What's even more interesting is that they said they are looking to raise rates three more times next year. The stock market didn't like that and we saw the Trump-induced rally in Dow Jones lose steam. The US dollar was the biggest winner in the event as it surged against all other markets.

EUR/USD fell below 1.05, USD/CAD reached above 1.33, USD/JPY was just a few pips shy of 118.

On the larger scale, President-elect Donald Trump wants to see the economy growing at a 3% to 4% growth rate and he's looking to pursue fiscal policy through tax cuts. Janet Yellen, however, wants to see the economy run a little bit faster and to lower the unemployment a bit more but she doesn't want to see the economy overheat. And if she sees the economy overheating, she's going to raise interest rates more. And that could make FED Chair Janet Yellen a thorn in the side of the new US President Donald Trump.