Jeremy Cook, chief economist at international payments company, World First, said:
The economic arguments for beginning a policy of rate normalisation have been in place for a while; the jobs market is strong enough given unemployment in the US has halved since 2009, the economy is growing well too, despite headwinds to contend with such as the Chinese and European wobbles throughout the summer, and inflation is expected to pull higher in 2016.
Today was not about that. Today was about maintaining some semblance of market credibility following frequent missteps and miscommunications.
Communications alongside the announcement have stressed the graduality of ongoing rate hikes with markets in the aftermath predicting the next rise to come around July 2016. The unanimity of the vote for a hike is a bit of a surprise but speaks to Yellen’s careful stewardship of what today’s meeting needed to be more than a committee that is in lock step to bring policy higher.
The Fed has got what it wanted so far; the first step on a long road that has not scared the horses for now.