WSJ.com is available in the following editions and languages:
Thank you for registering.
We sent an email to:
Please click on the link inside the email to complete your registration
Please register to gain free access to WSJ tools.
An account already exists for the email address entered.
Forgot your username or password?
This service is temporary unavailable due to system maintenance. Please try again later.
The username entered is already associated with another account. Please enter a different username
The email address you have entered is already in use.Please re-enter the email address.
From time to time, we will send you e-mail announcements on new features and special offers from The Wall Street Journal Online.
Create a profile for me in the Journal Community
Why Register?
Privacy Policy | Terms & Conditions
As a registered user of The Wall Street Journal Online, you will be able to:
Setup and manage your portfolio
Personalize your own news page
Receive and manage newsletters
Receive and manage newsletters
Keep me logged in. Forgot your password?
No matter how much the Fed has telegraphed this move and tried to assure markets that this doesn’t mark the start of a tightening regime the Fed’s hike of the discount rate still caused a knee-jerk reaction in the markets. Here’s a snippet from The Journal’s report:
The U.S. Federal Reserve Thursday raised the rate it charges banks for emergency loans by a quarter percentage point, but emphasized that the step didn’t represent a broader tightening of credit.
In a widely expected move, the U.S. central bank said the increase in the discount rate to 75 basis points from half a point was part of the Fed’s steps away from its emergency-lending efforts. The increase will be effective from Friday.
“Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve’s lending facilities,” the Fed said in a statement.
Fed officials had been signaling for some time that they intended to begin raising the discount rate as financial markets heal. They lowered this rate aggressively early in the financial crisis to give commercial banks added incentive to come to the Fed for emergency loans and continued to push it down as the crisis worsened. With the need for emergency funds waning, the Fed increased the rate from 0.5%.
A quick synopsis of how the markets moved after the Fed’s announcement. The dollar rose sharply against the euro. Prices of U.S. debt, such as the 10-year T-note fell. S&P 500 futures fell sharply. “This is likely to cause added volatility tomorrow morning,” wrote Paul Hickey, of Bespoke Investment, in an email to MarketBeat. “Buckle your seatbelt at the open.”
StumbleUpon
Digg
Yahoo! Buzz
Fark
del.icio.us
MySpace
Error message
MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. The Wall Street Journal's Matt Phillips is the lead writer, with contributions from other Journal reporters and editors. Have a comment? Write to marketbeat@wsj.com or write Matt directly at matt.phillips@wsj.com.
Read Full Article »