The Federal Reserve recently released a statement, that hints towards rising interest rates in the US. This could happen in June, but a specific time is unclear, as of now. Mere hour after the statement was released, the stock market’s reaction was positive to the news. The market rose by 1%. This signals lack of clarity in the initial message of the Fed more than anything else, because ordinarily, interest rate hikes lead to stock market falls.

The short term interest rates have been steadily kept close to zero by the Feds since the Financial Crisis of 2008. Traditionally, the balance of the economy has been maintained by this management, even before the crisis.

However, the Fed also said that the rates will not be raised until the labor market shows some amount of improvement and inflation rate targets are reasonably met.

According to the Fed projection, the current employment rate, which stands at 5.5%, would fall and average from 5 to 5.2%. The inflation rate expectations of the Fed for the years to come is also relatively low. For 2015, the rate would be lower than 0.8%. The Fed target for 2016’s inflation is 2% and it is estimated that the rates would stay way under that ceiling.

Ref: http://www.vox.com/2015/3/18/8251825/fed-interest-rate-hike