tutor2u | US Fed raises interest rates driving the dollar higher

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US Fed raises interest rates driving the dollar higher

Geoff Riley

15th December 2016

The strengthening US dollar is not perhaps what Donald Trump had in mind when he said he wanted to make America great again. It will erode the price competitiveness of manufacturing exports and perhaps hit those states that gave him a narrow win.

The U.S. Federal Reserve has moved up the benchmark monetary policy interest rate by 0.25 percent to between 0.50 percent and 0.75, and signalled a faster pace of increases in 2017. It is the first of a series of moves taking nominal interest rates closer towards a normal position that - in case of a future slowdown - will give the US Fed some room to ease policy again to support confidence and demand.

Infographic: Federal Reserve Moves Up Base Rate 0.25 percent | Statista
You will find more statistics at Statista

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.


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