Fed Ends Zero-Rate Era; Signals 4 Quarter-Point Increases in 2016

Aryabhatta, a 5th century AD mathematician from India, is credited with formally introducing the currently prevalent usage of zero as calculation aid. Its usage developed in the Hindu system over 500 years and culminated in its modern form. US Federal Reserve held on to the Zero interest rate from 2006-20015, 9 long years, which was finally broken on Dec 16th 2015.

Lets see the impact on economies:

The Bank of Japan, the European Central Bank and the People’s Bank of China are pumping more money into their economies. The Fed’s tightening will put those efforts on steroids. Emerging markets will pay more for their loans, but the warning of gradually rising rates has been well telegraphed with Janet Yellen saying last month she was "looking forward" to a rate hike. In Australia the fallout will be minimal, where the Reserve Bank's cash rate looks set to remain steady at 2 per cent in 2016 with the outside chance of further rate cuts.

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