In a suprise move the Federal Reserve raises the Discount Rate

After the market close on Thursday the Federal Reserve announced that it has raised its discount rate (the rate it charges banks for emergency loans) by a quarter percentage point to 0.75%. This is the very first step in the Fed’s inevitable move to normalizing monetary policy.


In reaction to this news the US dollar strengthened and the S&P 500 futures dipped by about 1%. So, we can expect a down open on the market Friday morning.

We have been at a crossroads in the market of late. The market’s reaction to this change in the Fed’s posture should shed light on the road ahead. At the moment we have a big cash position, so we can sit back and watch what unfolds with immunity.

Gerritz Wealth Management, Inc.