(MENAFN– ecpulse)
The U.S local market closed in green territories as minutes from the Federal Reserve’s last meeting eased concern about the timing of future interest rate hikes after the Standard & Poor’s 500 Index yesterday snapped a three-day slip to the downside.
Up till now the Fed reduced the monthly pace of purchases by $10 billion, to $55 billion, and repeated it is likely to continue paring the program in “further measured steps.”
Three rounds of bond purchases from the Fed have helped fuel economic growth and today many Federal Reserve policy makers said the Committee’s forecasts for the likely timing of interest rate hike exaggerated things in the markets, and made an effort to stress that rates would remain very low for some time.
“A number" of Fed policymakers voiced concern that the rise in the interest rate forecast "could be misconstrued as indicating" an earlier increase in rates. Several said the increase "overstated the shift in the projections."
Now as it turned out, the Fed officials were very predictive. The S&P 500 has advanced to its high of the day on the news, and Treasuries have turned positive as well.
On March 19, stock markets in the U.S. and around the world fell sharply when policymakers` forecasts showed that they expected the Fed`s benchmark short-term interest rate to rise to 2.25% by the end of 2016, up from their previous estimate of 1.75%.
Yet most policymakers favored adding explicit language to the statement to indicate that the Fed`s new forward guidance "did not imply a change in the committee`s policy intentions."
Accordingly:
-The Dow Jones Industrial Average rose 1.11% to 16437.18
-The S&P 500 Index climbed by 1.09% to 1872.18
-The NASDAQ Composite inclined by 1.72% to 4183.90. As of 16:15 p.m New York time.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.