How Tonight's U.S. Fed Rate Decision Will Affect You

The effects of today’s U.S. FOMC Interest Rate Decision will be felt far and wide across the global financial markets. It is expected that for the first time in 9 years, the U.S. Fed will open the door for gradual interest rate increases. If we see the start of a Fed rate liftoff cycle today, the immediate focus will be on when the next rate hike will come. We expect that the Fed will try to tone down the event with some points of cautiousness regarding the health of the U.S. economy. However traders see it, we all have to adjust to a world of higher U.S. borrowing cost.

Traders will now have to adjust expectations of a stronger U.S. dollar world. Once the door is kicked open and the Fed begins the next interest rate cycle, the effects will reach all market participants, from traders to small homeowners. The fact that this event will affect all those who borrow in USD means that commodity prices such as Oil will also continue to be heavily affecting those who are not market traders. Stock markets will also be affected; since in the sort term, the rate hike will be viewed as a boost of confidence which may propel an already robust stock market even higher.

As a broker, we are expecting that our client trading volumes will increase, as our clients will seek out new market opportunities as a result of the changing market conditions created by this historic moment given that the U.S. starts to move past the era of cheap money and into a new ear of growth and prosperity.

I wish all traders good luck and successful trading as we move forward and into the New Year.