Investors cheered the Federal Reserves minutes released Wednesday as central bankers have expressed willingness to remain flexible with regards to higher interest rates. The positive mood was reflected in the markets. Indeed, stocks closed higher, as the Dow Jones Industrial Average climbed 191.66 points or 0.6%. The S&P 500 also made gains, finishing with 1% in the green, and the Nasdaq Composite advanced 1.5%.
The Fed Minutes Carry Positivity
U.S. stocks ended in positive territory following the Feds announcement, signaling that the central bank is open to a more hawkish approach on interest rates. Further, Fed officials vowed to take more pertinent actions to address rising inflation.
Investors were increasingly concerned about whether the Fed would take a more aggressive stance, fearing further damage to the economy. Mounting pressures on households seeing their purchasing power decrease also weighed on sentiment.
In fact, a gloomy outlook has dominated market dynamics, considering the impact of the war in Ukraine, the strict COVID lockdowns in China, and continuous supply chain issues.
Yet, Fed Chairman Jerome Powell did plan to raise the benchmark interest rate by half-a-percentage point in June and July. Experts chiming in also expect the Fed to make a series of quarter-percentage-point rate increases at the September, November, and December meetings.
Assets in Focus
The ICE Dollar Index, which determines the greenbacks value against several other major currencies, was up 0.3%. Oil futures settled at around $110 a barrel and gold was trading at $1,846.30 an ounce.
On the digital currencies front, Bitcoin fared quite well and gained 1% reaching nearly $29,600. European equities also closed in the green, while Asian markets performed slightly weaker with the Nikkei down 0.3%.
Leave a Reply