TraderWise

Yesterday, the market staged a nice rally and it finished near its high of the day. The credit crisis in Europe is not imminent and traders are focusing on solid earnings. Overnight, the Fed raised its Fed Funds rate by .25%. It will now cost banks more to borrow money from the Fed. This move was largely anticipated, rates can't stay at zero forever. The market is interpreting this as positive news. Banks have improved their balance sheets enough to attract private equity and they aren't as dependent on the Fed. This year, there will be monetary tightening.