Limited market reaction to the Federal Reserve's decision to raise interest rates

Financial markets showed a limited reaction to the Federal Reserve's decision to raise interest rates by a quarter of a percentage point, on Wednesday, with stocks continuing to rise and Treasury bond yields declining, despite the central bank's expectations indicating the possibility of another hike before the end of the year.

The Standard & Poor's 500 index rose by about 0.4 percent, while the Nasdaq index increased by about 0.8 percent, while US Treasury bond yields declined.

The two-year bond yield, which is most sensitive to monetary policy expectations, fell 2.7 basis points to 4.631 percent, while the 10-year bond yield fell 4.1 basis points to 4.957 percent, and the 30-year bond yield fell 4 basis points to 5.323 percent.

The dollar index rose 0.2 percent to 99.89, while gold reduced its gains after the decision, as the spot price rose 0.9 percent to $4,330.19 per ounce, after earlier recording gains of 1.6 percent.

The markets' reaction was calm despite the Federal Reserve's expectations, which showed that 16 out of 18 officials expected to raise interest rates again by at least a quarter of a percentage point before the end of the year.

Brian Jacobsen, chief economist at Annex Wealth Management, said that the limited reaction reflects that Kevin Warsh supported raising interest rates, in a move that is in line with market expectations, despite the change in the course of monetary policy.