The FOMC raised interest rates by 25 bps this afternoon, taking the Federal Funds Target Rate to 0.50 percent to 0.75 percent. The move was the first rate hike since December 2015, and only the second time the Fed had raised rates since 2006. (See also: Fed Set To Raise Rates on Wednesday.)

In its policy statement, the Fed said it sees the near-term risks to the economy as balanced. Additionally, the Fed is seeing continued improvement in the labor market and judged that economic activity has been expanding at a moderate pace. The statement acknowledged taht inflation has increased since earlier this year, although at a rate that is still within the FOMC's objective of 2 percent. 

Reviewing the statement further, it indicated the Fed feels the economy is currently robust enough to warrant more rate increases. However, the Fed will continue to maintain an accommodative policy stance. The FOMC continues to hold the position that economic conditions will continue to warrant only gradual increases rates and will likely remain this way for some time. 

Before the announcement, equity markets had been quiet with the S&P 500, Dow Jones Industrial and Nasdaq all trading flat on the day. Ten-year Treasury yields had been by down about three bps to a yield of 2.45%. Meanwhile, the US Dollar had been relatively stable versus the Euro and Yen, trading at 1.0645 and 115.28, respectively. 

Following the news, the major equities indexes are moving lower, with the S&P 500 down 7 points to 2264. Meanwhile, 10-year Treasury yields are moving higher by 2 bps to 2.50%. Meanwhile, the dollar is strengthening versus the Euro to 1.0566 and the Yen to 116.31. The market appears to be taking today's announcement with the viewpoint that Fed has become slightly more hawkish. 

With the Fed now sounding more hawkish, one would expect to see the dollar strengthen further and Treasury yields to move higher as well. Today's announcement could be a mixed bag for equity prices. Should yields continue to move higher and the dollar strengthen, it will pressure higher yielding equities and dollar-sensitive multi-national companies, and hurt prices for commodities and materials.