Fed Rate Hike Sparks Share Rally, Oil Prices Fall
Investors reacted positively to the Federal Reserve's decision to raise interest rates for the first time in over three years, with shares ticking higher across Asia.
The Fed increased rates by a quarter point, but the unanimous decision had a hawkish tone, indicating that there may be one more rate hike this year. Goldman Sachs analysts believe that October is the most likely time for the next move, citing it as 'the most natural to deliver hikes that the FOMC presented today as supporting a timelier return' to the 2.0 per cent target.
The US dollar hit a seven-week high against its major peers, including the yen and euro, underpinned by a jump in short-term Treasury yields. This had a negative impact on commodity markets, with oil prices falling and gold showing some resilience.