US Fed has raised interest rates by 25 bps = Jun 15, 2018


US Fed has raised interest rates by 25 bps on Wednesday. The Fed Chairman has clearly stated that they could go for two more rate hikes this year and could go for 3 rate hikes in 2019. The unwinding of balancesheet is in progress and it will continue to happen slowly and steadily as per the previous plan. From Oct 2018, they will be withdrawing around $ 50 billion per month and about $ 600 billion annually. We will see similar process by ECB from next year end onwards.So, when both the powerful Central Banks start withdrawing, things might get ugly. If earnings for companies pick up and if global economies remain good, the process would be less painful, otherwise it would be much more painful.

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