Market Talk Update – March 22, 2018

** Previous BOJ Overnight Interest Rate (policy rate) as at January 18, 2018  

At the conclusion of its two-day meeting, the United States (US) Federal Reserve raised its benchmark interest rates by 25 basis points (25%), to range between 1.50% and 1.75%; in line with market expectations. This rate hike is the first since the start of 2018 and will mean higher U.S. borrowing costs (i.e. interest rates) for consumers and businesses. The US Fed did, however, indicate that it will be maintaining gradual policy tightening with three (3) interest rate hikes in total for 2018. The Fed’s gradual pace is aimed at providing room for them to focus on inflation targeting and observe whether the new fiscal stimulus program under the Trump Administration will strengthen inflationary pressures in the economy in the near-term.