Liftoff! Asian markets rise after historic Fed decision

The change in rates from loans will increase banks’ profits.

Good retail sales numbers made a rate hike by the US Federal Reserve nearly certain.

To be sure, interest rates on credit cards are usually pretty high (the average is 18%), so your monthly payments will only be marginally affected by the Fed’s first rate hike.

The Fed is expected to maintain the fed funds rate through a number of tools, most importantly the interest rate on excess reserves, or IOER, the payment to banks for the $2.5 trillion or so reserves they now hold at the Fed.

In attempts to make ends meet, banks realize gains from other areas of earnings as well.

In corporate news, pharmaceuticals giant AstraZeneca was on the front foot after announcing the acquisition of a majority stake in United States and Netherlands-based Acerta Pharma in a deal valued at $4bn (£2.7bn).

Hong Kong shed 0.2 percent and Sydney gave up 0.1 percent.

That said, it is expected that the dollar has further to go this time and will continue to strengthen following the rate rise. “A lot of people have already moved in”, said Eddie Perkin, manager of the Eaton Vance Focused Value Opportunities Fund.

“The Federal Reserve will probably raise interest rates in December and follow that with a further 100 basis points of increases over 2016, according to Goldman Sachs Group Inc., which said the shift in US monetary policy will hurt gold”. The cost of carrying a balance will only increase as interest rate hikes occur.

The Fed’s rate hike was the first in almost a decade, and the first move in policy since it lowered rates to the zero-bound range during the financial crisis. Currently, the economy is growing modestly, Kroszner said.

“Dividend stocks are still of interest because rates are going to remain low for awhile”, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. The rate hike also sent the US dollar sharply higher on Thursday as it signals Fed confidence in the health of the American economy.

In the period since the onset of the great recession every central bank that raised rates, including those in Sweden, Denmark, Canada, Switzerland, New Zealand and Israel were forced to reverse course when their economies slowed and it became clear that they had raised too soon.

Reacting to the Fed move and its impact on India, Finance Minister Arun Jaitley said that the markets will now have to reconcile to the new situation as the suspense is over now. South Korea’s Kospi added 0.4 percent to 1,977.96. Often adjustable-rate mortgages can be reset at a higher rate once a year, and because it’s once for a full year, the increases “come in spurts, not drips and drabs”.

“Indeed, conditions may worsen, particularly if these economies feel that their only response to the growing pressures in their domestic economies is to intentionally depreciate their currencies even further”.

But this is also true: The worst-case scenarios envisioned by the Fed’s most ardent critics haven’t come to pass. Just a few years ago, members of Congress and critics elsewhere warned that we’d be awash in hyper-inflation by now.

Q: Have you been having trouble getting a mortgage? “So if they take markets off guard they get hurt themselves”.