Alternately, they can put in place limits to risk-taking in the financial sector and aggressive examination of the health of financial institutions.

Fund inflows and the options market show the extent of optimism on banks at the end of an unprecedented stimulus campaign by the Fed. Asset prices fall, companies prove to be less financially secure than investors thought they were, go bankrupt, and are unable to pay back their debts. But, the banks didn’t raise the interest rates on savings accounts or Certificates of Deposit, which would benefit Americans.

The Fed and the ECB are moving in opposite policy directions as the US economy strengthens while Europe struggles with tepid growth, high unemployment and anemic inflation far from the ECB’s target despite its best efforts so far to boost it.

“The Fed is one of the most trusted bodies in America”, Davis said in an interview after the decision.

“The inflation outlook has continued to quell any expectations for a near-term hike in rates from the Bank of England, with the latest push lower in energy prices set to push down on the recovery in headline inflation over coming months”, Simon Smith, chief economist at FxPro, said in a research note after the data was out.

“The Fed appropriately telegraphed the one-quarter to half-percent increase, so there were no surprises to the markets, businesses or consumers”, said Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association.

While banks and brokerages have posted some of the S&P 500’s biggest gains since markets bottomed in March 2009, the trajectory mostly reflects the speed at which they plunged in the 18 months before that. That’s a full 3 percentage points below the average of 2005 to 2007.

“If you have a mortgage that’s an ARM, that will adjust in the next few years you should definitely contact your bank and look at locking in your interest rate”.

JPMorgan Chase said that it would also raise its so-called “prime rate” (the best rate you can borrow money at) to 3.5%, but it would not be doing anything more for savers at this time. Much of this is down to the lack of affordable housing and relatively low numbers of new builds and this is unlikely to change in the short term.

For starters, Britain´s economy faces much larger fiscal headwinds than the US. Wednesday’s market’s reaction “was a confidence rally”, he said in an interview. Rates hit an all-time low of 0.25 percent in December 2008, as banks around the world collapsed.

At the same time, concern about the volume of trading on Wall Street has been pushing estimates down for the current quarter. An idea called “the impossible trinity” says that it’s impossible for countries to have a fixed exchange rate, an independent monetary policy and the free flow of capital at the same time. Mr. Carney acknowledged in a recent speech that sensitivity to rate increases “may be particularly relevant in our still heavily indebted post crisis economy”.

Regardless of rates, there are also still bumper balance sheets, swollen by years of quantitative easing.

“Financials comes up pretty favorable”, Mark Spellman, a fund manager who helps oversee $4.2 billion at Alpine Funds in Purchase, New York, said by phone.

But critically, the weak peso hasn’t translated into higher consumer prices. But it also means the Fed needs simultaneously to “drain” dollars out of the system, making them more scarce and thus more valuable in terms of purchasing power.