The Federal Reserve raised interest rates on Wednesday for the first time since 2018. To control the 40-year high inflation level in the US, the US Fed announced an interest rate hike in its meeting on March 16.
The US Fed decided to increase the interest rate by 25 basis points (0.25%) and Fed Chairman Jerome Powell said that going forward, the Fed will increase the rate even more to control inflation.
After this, the US 10-year bond yield also rose to above 2.2%. However, it is not showing any negative impact on the equity market. Both Sensex and Nifty were trading up 1.8% in early trade.
A positive rally was also seen in the rest of the Asian market. Even US market indices such as S&P 500, Dow Jones, and Nasdaq all closed higher.
This could be because all the markets have already discounted the rate hike news by the US Fed and the 0.25% hike is in line with the market’s expectation.