The last time the Federal Reserve raised its target interest rate, the decision did not seem such a big deal. It was June 29, 2006, US inflation was running at 4 per cent, stock markets had been rising unremarkably for 18 months, and
everybody knew the rise was coming.
The Fed’s brief communique, in which it removed its customary commitment to raise again at its next meeting, was enough to prompt a big rebound for stock markets.
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