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Thursday 1st of July 1999

US FED RISES RATES 0.25%

The United States Federal Reserve has raised interest rates by 25 basis points.

The news was well received by the US sharemarket, with the Dow Jones rallying up to 200 points after the announcement. It ended the day 155.45 higher at 10,970.80.

Federal Reserve chairman Alan Greenspan indicated that this was a one-off tightening, rather than the first of a series of rate increases. He also indicated that the Fed had moved from a tightening bias back to one of neutrality.

The 30 year bond rallied strongly also and is back under 6 per cent.

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