It’s been almost ten years since the last rise in the US cash rate. That changed overnight when the Federal Reserve added 25 basis points to the current range of 0% - 0.25%. Analysts will be arguing over the impacts for Australian business and investments.

One of the key drivers was the fact employment is sitting at 5% which is half of where it was in 2009 at the height of the GFC. The current figure is pretty what economists describe as ‘full employment’.

Interestingly, while the US housing market is also showing positive signs, inflation remains at almost zero – stubbornly a long way under The Fed’s target of 2.0%. Analysts are looking to wage growth as the anchor on this number.

This lift in interest rates will be the first of an incremental range over the next 12 months. Federal Reserve Chair, Janet Yellen, is pulling the levers early in order to minimize shocks as employment continues to fall (2016 forecast: 4.8%) putting an upward pressure on wage costs.

For Australians, it seems the impact on Australian will be minimal, with those invested in US bonds or property, or with American shares as part of a portfolio likely to experience some adjustment. Owners of commercial buildings in Australia could see a slight benefit as some capital flows out of smaller economies – including many of those in the region – from the US investments to the Australian property market.

The important lesson is this: Yellen has frequently mentioned in her comments and forecasts that this rise is part of a plan of moving slowly, and nobody should be surprised.