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What gives? Why did financial conditions ease instead of tighten after the Fed raised interest rates?

It's only the beginning of the end of ultra cheap money.

Interest rates remain historically low in the wake of the Great Recession, but will likely be on the rise if the Fed carries out its planned series of hikes over the next few years, which could increase the burden of mortgages and credit card debt.

The annual unadjusted Consumer Price Index released on Wednesday increased 2.7 percent, the highest in five years, and the unadjusted core CPI, excluding volatile food and energy prices, increased 2.2 percent for the full year.

Hong Kong jumped 2.08 per cent yesterday, Taiwan climbed 1 per cent, Malaysia gained 1.15 per cent, and Thailand was up 1.05 per cent.

On the inflation front, consumer prices increased a bit more than expected, pushing the annual rate to 2.7 percent from the 2.5 percent rate in January.

Analysts thought the Fed might signal three more this year, but policymakers need details from the Trump administration about its tax reform and fiscal spending plans.

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Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, fell 0.28 percent on Thursday, the first outflow this week. One US dollar could buy S$1.4036 yesterday, compared with S$1.4124 on Wednesday.

Silver was up 0.4 percent at $17.35 an ounce, while platinum gained 0.1 percent to $954.80 and palladium advanced 1.8 percent to stand at $777.70.

But CIMB Private Bank economist Song Seng Wun remains bullish on the greenback.

More recently, however, the market had no doubt about the upcoming rate hike, and even say the increases is already priced into the market. The average rate on a 30-year fixed-rate mortgage has surged to 4.2 percent from last year's 3.65 percent average.

Although today's move to raise interest rates was widely expected, the overall atmosphere of optimism continued to prevail in U.S. equities markets. The Fed had cut during the 2008 financial crisis to a record low in order to help steady the economy and only gradually began to increase it at the end of 2015. It was the Feds second bump in the last three months.

The FOMC's next meeting is scheduled for May 2-3. Every summer, the interest rate on new federal student loans changes and it's tied to the May auction of 10-year Treasury note. The most recent hike was in December.

However, formed Fed governor Robert Heller admitted that the United States economy is still behind where it should be, telling CNBC that interest rates should be at around 3 percent now that the Federal Reserve has achieved all of its targets.


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