US interest rate rise signals end of ultra-low borrowing costs

Will Fed's steady march to 'new normal' scare away the ghosts of financial crisis?

It could have been worse. That was Wall Street's initial response to the decision by the US Federal Reserve to raise borrowing costs in the world's biggest economy by a quarter of a point.

For once, the market reaction was entirely rational. The increase in interest rates was expected and it would have been a real surprise had Janet Yellen and her colleagues at the US central bank decided against a move.

Related: US Federal Reserve raises interest rates to 1% in bid to hold off inflation