US Federal Reserve raises rates and trims outlook for 2019 rate increases

US Fed raises lending rates for 4th time this year defies Prez Trump

He called the Fed his "greatest threat" in October in an interview with Fox Business and has singled out Fed Chairman Jerome Powell for pointed attacks.

The Stoxx Europe 600 Index increased 0.3 per cent. But rather than providing proof of a decoupling of the economy and markets, the change is in fact a partial closing of the gap that was created under former Fed chairs. That's a substantial move for that benchmark lending rate. Britain's FTSE 100 rose 1 percent while Germany's DAX added 0.2 percent and the CAC 40 in France rose 0.5 percent.

Gold miners lost some of yesterday's lustre on subdued precious metals prices, with a 3.11 per cent dip for Northern Star, a 3.08 per cent hit for Evolution, and a 0.65 per cent loss for Newcrest.

Kelly said the recent market slide could present an entry point, especially for investors who previously felt stocks were too expensive. Heating oil fell 1 percent to $1.73 a gallon. If the decision had been out of line with expectations, it's more likely there would have been a more amplified movement in share prices one way or the other.

Some, including me, expressed concerns about the risks and unintended consequences of central banks continuously "goosing" markets.

The Fed said on Wednesday that the USA economy has been growing at a strong rate and the jobs market had continued to improve.

USA stocks slipped on Thursday, continuing their declines from a day earlier, as a batch of disappointing earnings reports added to the gloom after the Federal Reserve quashed hopes of a toned-down approach to its interest-rate hike trajectory. The Nasdaq plunged 8.4% on the week, its worst since November 2008.

Defense contractors fell after President Donald Trump said he's withdrawing US soldiers from Syria in an unexpected move.

The stock market turned sharply lower Wednesday after Powell spoke at his press conference that followed the Fed's rate hike.

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World's second-largest stock exchange lost almost 3 percent, bringing its losses to 20 percent from its previous high.

The Japanese yen gained 0.1 percent to 112.39 per dollar. "And I'm not blaming anybody, but I'm just telling you I think that the Fed is way off-base with what they're doing".

"It's not as dovish as expected, but I do believe the Fed will ultimately back off even further as we move into the new year".

Trump has always been opposed to rising interest rates on the basis they might hamper economic growth, and has in the past called the Fed "crazy" and "loco" for doing so.

The rate increase, to a range of 2.25 percent to 2.5 percent, was the Fed's fourth this year. The updated dot plot implies a total of two 25-basis-point fed-funds rate hikes for 2019, with one additional hike in 2020, with the three total hikes through 2020 one fewer than was implied in the September 2018 edition of the dot plot.

Though also politically unpopular among some lawmakers, the system has largely worked well, with some adjustments, at fixing the federal funds rate within the range set by officials.

"We see slowing economic and earnings growth and a carousel of concerns", said Keith Lerner, chief market strategist at SunTrust, in a note to investors Friday. An increase in the benchmark rate raises the cost of borrowing in the United States, which tames inflation and cools the economy.

The rate hike came a day after Mr Trump urged the Fed not to "make yet another mistake", while on Monday he said it was "incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us. the Fed is even considering yet another rate hike".

There are worries, however, that the economy could enter choppy waters next year as the fiscal boost from the Trump administration's spending and $US1.5 trillion tax cut package fades and the global economy slows.

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