The Fed did as expected and held steady. The result is the dollar declined around 1% or so depending on the currency. This sets up a problem for the rest of the world central banks which were trying to devalue their currencies relative to the dollar to attempt to boost their own economies. If the dollar weakens then the efforts of the other central banks is not having the desired impact and may leave these other central banks struggling to find new ways to stimulate.

One way is negative rates as the ECB is trying, which they hope will push money out to loans to companies by banks. It is unclear if this will really work since borrowers do not take loans if they believe business will remain slow. At the moment there is little reason to expect the world economy to improve much, if at all, in 2016. China is still going through a major credit crisis and massive shift in the focus from export to domestic demand. Japan seems unable to get any real lift. The Eurozone remains mired, and its banks still have not dealt with their real structural issues.  Latin America is in major crisis as Brazil and Venezuela are in total political and economic collapse.  The smaller countries which depend on oil, commodities and exports to these bigger nations, are in serious trouble. The US remains the only country which has a decent economy and strong banking system other than the UK.

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