Yesterday’s FOMC decision to raise the U.S. interest rate by 0.25% to 1.50% had been long expected by the market and was no great surprise, but the following hours saw a responsive hike by China albeit by just five basis points. The FOMC’s forward guidance foresaw a slightly faster pace of economic growth due next year, projecting GDP increasing by 2.5%, instead of 2.1%, for 2017 and 2018, and implies a continuing anticipation of a further three rate hikes over 2018, broadly in line with expectations. The major area of concern was over the apparently stubbornly low inflation rate, although Janet Yellen suggested it is a temporary anomaly. The FOMC also hinted that the economy is very close to full employment.

The market’s reaction to the FOMC output was largely muted. U.S. stock markets had risen slightly during the day, yet after the release, they stayed broadly flat and have continued so. The U.S. Dollar took a moderate hit, dropping against the other three major global currencies and precious metals such as Gold. Almost twelve hours after the rate hike, Gold was up against the greenback by 0.80%, the Japanese Yen by 0.51%, the British Pound by 0.48%, and the Euro by 0.42%. WTI Crude Oil was down by 1.56%, while stocks and Bitcoin remained largely flat.

The small Chinese rate hike knocked Chinese equities back a little, but has had no real wider effect: the Australian Dollar has continued its recent recovery of recent days during Asian trading.

In the U.S. Congress, Republican leaders say they are closer to securing a deal which will enable the speedy passage of a reformed tax package, suggesting a reduction in the corporate tax rate from 35% to 21% is likely, while the top rate of individual federal income tax would barely change.