US Federal Reserves raises interest rates for first time in nearly a decade

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The US Federal Reserve (Fed) has raised interest rates for the first time in almost a decade by a quarter of a percentage point. The historic and unanimous decision by the Fed's Open Market Committee (FOMC) on 16 December follows a two-day meeting in Washington.

The first rate hike ? by 0.25% to 0.5% ? since June 2006 by the Fed closes the chapter on an unprecedented era of easy monetary policy. The US central bank sets the base cost of borrowing and as a major determinant of the global economy, the move will have ramifications worldwide. In September, the World Bank warned that a rate rise could adversely affect emerging economies caused by disruption to capital flows.