Fed Interest Rate Hike: The Canaries Are Quiet

Fed Interest Rate Hike: The Canaries Are Quiet by 720 Global

In the late summer months of 2015 the Federal Reserve were actively discussing the possibility of raising the Federal Funds rate signaling a reversal of their prolonged, zero-interest rate, crisis management attitude towards monetary policy. The prospects of rising U.S. interest rates occurring while many central bankers were actively lowering interest rates and/or printing upset the global financial markets. In mid-2014 when this policy divergence was first suspected by market participants, the U.S dollar started rising against most currencies. The trade weighted broad dollar index rose approximately 15% from mid-2014 to mid-2015.

As 2015 progressed, markets around the world were slowly taking notice of the dollar’s ascent and...