The taper without a tantrum

The fact that the Fed stood its ground seemed to indicate that the Fed was in a 'hawkish' mode

The US Federal Reserve delivered its expected quarter point hike in interest rates last Wednesday. Currency markets did respond to the Fed move despite the claim by many analysts that it was all “priced in” earlier, although nowhere as vehemently as during the taper tantrum of 2013. The US dollar gained against a number of G-7 currencies like the Euro as well as a basket of emerging market currencies. On the whole, the Fed successfully portrayed itself as serious about unwinding liquidity at a steady pace without an adverse market reaction. One should remember that Ms Yellen’s tenure will come