The markets bet against the US Federal Reserve announcing a rate hike earlier in the week and that gamble paid off, as the Fed's steady hand had stocks responding positively on both sides of the Atlantic.

Many European markets were trading 1% higher this morning, following the expected decision by the Fed to leave US base interest rates unchanged at 0.5%.

While not raising rates "for the time being", it did give strong indications that it could tighten monetary policy by the end of the year. The Fed is waiting for further evidence of economic of progress before doing so.

If a change does come in December, the Fed does not believe that it will be as sharp as they did in June. In a summer statement, they had anticipated possible five 0.25% increases by the end of 2017. That forecast has now been reduced to three 0.25% rises. 

A CNBC survey of financial experts prior to the announcement found that 90% expected the central bank to hold tight this time around. However, 88% believe that a move will be made in December.

One surprising admission in the Fed's statement was that three of its 12 members had disagreed with the decision. 

Chairwoman Janet Yellen has been very adept to date in producing agreed public statements by the Fed’s Open Market Committee on monetary strategy. Yellen also took the opportunity yesterday to strenuously deny Donald Trump's claims that the fed's monetary policy has been affected by political pressures. She said:

"We do not discuss politics at our meetings, and we do not take politics into account in our decisions."

In many ways, the Fed was upstaged in the media by the Bank of Japan, who announced yesterday that it was getting even more experimental with monetary policy.

The BoJ is launching a new kind of easing, setting a cap on 10-year bond yields at 0% and promising to purposely continue buying assets so as to overshoot its 2% inflation target as it looks to defy market expectations.