Wall Street up as Fed is not willing to accelerate the pace of monetary tightening
Major US equity indices rose the most in two weeks on Wednesday following the Federal Reserve's decision to raise the interest rates by 25 bp as expected without accelerating its timeline for future tightening.
The Federal Reserve said on Wednesday that it would hike the benchmark interest rate by 25 basis points (target range of 0.75% - 1%); a decision that was widely expected. However, the fact that the longer-run dot plot remained unchanged at 3% and only one more rate hike is forecasted for the remainder of the year triggered a USD sell-off, allowing the Treasuries to rally.
Forex today: dollar tumbles on FOMC less hawkish than expected
Furthermore, energy stocks received a boost from rising crude oil prices. WTI finished the day at $49 (+2.64%) after the EIA’s weekly report showed US crude inventories decreased by more than 230K barrels during last week vs. an expected build of more than 3.1 million barrels.
According to the latest report published by U.S. Bureau of Labor Statistics, Division of Consumer Prices and Price Indexes, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent
in February on a seasonally adjusted basis, over the last 12 months, the all items index rose 2.7 percent before seasonal adjustment.
The Dow Jones Industrial Average rose 112.73 points, or 0.54 %, to close at 20,950.1, the S&P 500 added 19.81 points, or 0.84% to 2,385.26 and the Nasdaq Composite gained 43.23 points, or 0.74%, to 5,900.05.
Main headlines from the U.S. session
- US dollar index tumbles despite Fed rate hike
- Gold leaps to $1220 as DXY tumbles more than 1%
- Fed's policy-setting committee did not flag any plan to accelerate the pace of monetary tightening - RTRS
- Fed's projections showed the economy growing by 2.1 percent in 2017
- FOMC's decisions regarding monetary policy implementation
- Fed's Yellen: It's uncertain just how much sentiment impacts spending decisions
- Fed's Yellen: Headwinds from financial crisis remain
- Fed's Yellen: Basis for rate hike is progress of economy
- Fed's Yellen: We want confidence in economy before shrinking balance sheet