Future rate hikes are expected to be well telegraphed
Stocks on Wall St rose by close to 1.5% last night and European markets expect to post solid gains after the US Federal Reserve did exactly as it had signalled and raised US base interest rates by 0.25%.
The dollar has also risen by about half a cent against the euro overnight to $1 and 8.5 cents.
The markets were also pleased by both the unanimous verdict of all ten members of the Open Market Committee of the Fed and also the dovish or prudent comments made by Chairman Janet Yellen subsequently.
After the bones of a year in which the markets were trying to second guess when and how the Central Bankers would make their move, she said further moves will be very much driven by economic data rather than any pre-set target for the speed and size of interest rate rises.
But the market is already looking to those next moves and Brenda Kelly of London Capital Markets says the consensus is for even more gradual further increases than the Fed itself is signalling.
She commented that while some policy makers are forecasting that four additional rate increases could be rolled out during 2016 - but this should be taken with a "pinch of salt" - as the same individuals were predicting three increases during this year.
Brenda Kelly adds that future increases are expected to be well signposted and based on solid macro economic data.