Fed Hikes Rates, BoE Holds Firm as Markets React

The Federal Reserve raised interest rates by 25 basis points to a range of 3.75-4% in its latest decision, bringing an end to the recent period of monetary easing.

The move was widely expected and was seen as necessary to combat rising inflation, which is forecasted to reach 3.7% this year.

US markets reacted positively to the news, with futures showing strong gains ahead of the opening bell, with the Dow Jones, S&P, and Nasdaq all set to rise between +0.8% and +1.1%.

The Bank of England, however, left interest rates unchanged despite an increase in inflation in August, causing a slight dip in ten-year government bond yields from 5.36% to 5.24%.