On Dec. 16, the U.S. Federal Reserve’s (the Fed) decided to raised the target range of the Federal Funds rate (Fed Rate) for the first time since 2006, by 25 basis points to 0.25%-0.50%. Fitch Ratings expects Fed rate increases will be gradual and to a moderate level by historical norms, but U.S. tightening, divergent global monetary policies, and potential market reactions may add to some of the challenges facing Fitch-rated sovereigns.

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