Effects of starting to end cheap money to be seen

The much-anticipated hike in interest rates announced by the US Federal Reserve on Wednesday represents a belated beginning to the end of super cheap credit.

Given the failures by other central banks to secure sustained growth while getting rid of the life-support system of easy credit, it is far too early to tell if the United States' end to its unprecedented massive monetary experiment to fight the worst global financial and economic crisis in many decades will mark a turning point for a successful exit from abnormally low borrowing costs.

Yet recent signs of the US economy recovering from the global financial crisis justify the Fed's decision to raise its benchmark interest rates by 0.25 percentage points after cutting them next to zero since December 2008. With its consumer spending growth holding firm and unemployment standing at 5 percent, the US economy is ostensibly better positioned than most other countries to withstand the withdrawal symptoms of ending its addiction to easy credit.