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The Fed awakens: US interest rates start their rise

First published: Nikkei Asian Review, 17/12/2015

“There’s been an awakening — have you felt it?” asks Supreme Leader Snoke in the new “Star Wars” movie. Federal Reserve Chair Janet Yellen did not couch the U.S. central bank’s first monetary tightening cycle since June 2004 in those terms exactly, but the words are nonetheless apt.

The Fed on Wednesday announced a quarter point rise in the federal funds rate, meaning that the monetary regime established after the financial crisis, including a zero policy rate from December 2008 and three rounds of asset purchases under the quantitative easing program, is over. The principal focus now will be on how far and how fast interest rates climb, and what the consequences will be….Read more: