What's going on?

Although investors thought the opposite would occur if Donald Trump was elected, the US Federal Reserve (�the Fed�) looks almost certain to raise its target interest rate for the first time this year when it meets in mid-December.

What does this mean?

A senior Fed official said on Wednesday that, barring any major shocks, the Fed will increase its target interest rate in December. The official is only one of 12 voters, but markets share his view: investors are ascribing a 90% chance to an increase from the Fed, which is about as sure as the market gets about anything (although that, of course, could change).

Why should I care?

For markets: The US dollar has jumped higher since Trump�s election.
On Wednesday, the US dollar briefly hit a 14-year high versus a collection of other major currencies (like the euro, the yen and others). It�s up more than 3% versus those other currencies since Trump�s election. Why? For one, the returns that US bonds pay have gone up, which makes US bonds more attractive to international investors (who have to buy dollars in order to buy those bonds; click here for a more in-depth explanation). Also, more generally, investors like to invest where they think economic growth is improving – and, so far, investors seem to think a Trump presidency will lead to higher US economic growth.

The bigger picture: A stronger US dollar is often a positive for other countries.
As the dollar goes up, obviously the euro, the yen and other currencies become worth less compared to the dollar. That makes it easier for Europe, Japan and others to sell their goods in the international market (because they are, comparatively, cheaper). Of course, the flipside is that it creates a headwind for US companies who sell goods abroad.