Australian Investment Blog

Interest rates to rise in the US, how may it effect you?

Last night Janet Yellen, the US Federal Reserve chairwoman, announced interest rate increases could begin in the first half of 2015 on continued underlying strength in the domestic US economy. US equities fell on the news, as is to be expected, and perhaps at a slightly accelerated rate than anticipated. I would point out, however, that this morning's 114 point fall in the DOW may have been significantly more at the end of 2013 when investors were paranoid about Fed Tapering. Simple points to note:

Interest rates were raised in NZ last week (equities rallied) and the US is now anticipating a lift in 2015 - see chart 1 illustrating the rally in US rates.