Janet Yellen, Chair of the Federal Reserve, announced yesterday that the Fed will be raising rates by 25 basis points, to a range of 0.50 to 0.75%. This is the second rate hike in a decade with more to come. The Fed hinted strongly at further rate hikes as the economy begins to normalize.
The stock market had moved up to all time highs going into the rate hike. After the announcement, the stock market sold off as the news was digested. This morning, the market has again bounced back and is looking to move past all time highs again as the DJIA approaches 20,000. It seems the “Trump rally” is set to continue on great expectations. Eventually these expectations will meet reality.