Fed Raises Discount Rate to 0.75% From 0.50%

The Federal Reserve said on Thursday it raised the interest rate it charges banks for emergency loans but insisted that its first rate move since December 2008 would not raise borrowing costs for consumers or companies.

The Fed cast its decision to raise the discount rate to 0.75 percent from 0.5 percent as a response to improved financial market conditions that warrant less of a helping hand from the U.S. central bank.

Market watchers were shocked by the announcement, which came after markets closed Thursday.

It makes one wonder if the CPI number coming out tomorrow is going to be just horrible.

The analyst expects stocks to pull back from the Dow Jones Industrial Average's recent winning streak as a result of the Fed move.

One might expect a dramatic selloff at the open tomorrow morning.

The increase in the discount rate - Does not mean that the Fed is ready to hike [the fed-funds rate] or has a set time for such a move. But it does mean that the Fed is preparing the way.

This is very much a move to prepare markets and to test markets to see if they are ready to absorb a rate increase by putting the Fed’s lending vehicles back in a normal configuration.

Hope all is well with all!

Asian shares start trading lower on Friday as investors were cautious after the U.S. Federal Reserve raised the discount rate Thursday.

The Fed's move will certainly revive concerns in equity markets that the global tightening moves may come earlier than expected.

Hong Kong market is down 2.1% on opening i.e. 410 points lower.