The U.S. Federal Reserve has resumed normal monetary service by raising interest rates for the second time in three months. The Fed’s decision on 15 March 2017 reflects its confidence in the continuing expansion and signals that its efforts to relate the world’s largest economy are largely on track – with overall inflation seen to be stabilising around its longer run target of 2% over the next couple of years. Significantly, Chair Janet Yellen stressed that policymakers expect the strengthening economy would warrant “gradual increases” in the benchmark federal funds rate to ensure that the monetary policy stance remains accommodative of growth, even as price stability is ensured. This emphasis on ‘gradual’ provides a degree of policy predictability that markets, […]