What happens when US FED Hikes Interest Rate

The Federal Open Market Committee (FOMC), which decides on the monetary policy of the United States, meet on 16-17 June and did not raise the Interest rates as per market expectation . After this meeting, Janet Yellen, the Chairperson of the Federal Reserve spoke to the media.
Everything Yellen spoke about during the course of the press conference was closely analyzed by the financial media all over the world. The gist of what Yellen said at the press conference was that she expects that the Federal Reserve will start raising the federal funds rate sometime mid of this year.

The federal funds rate or the interest rate at which one bank lends funds maintained at the Federal Reserve to another bank, on an overnight basis, acts as a benchmark for the short-term interest rates in the United States. The last time the Federal Reserve increased the federal funds rate was in 2006.

In the aftermath of the financial crisis, the Federal Reserve decided to print money and pump it into the financial system by buying government bonds and mortgage backed securities. The Federal Reserve referred to this as the asset purchase programme. The economists

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