Dow falls, Nasdaq rises after mixed Fed rate decision
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Major indices tumbled just after the policy statement was released but recovered somewhat later during Fed chairman Jerome Powell’s press conference.
PHOTO: AFP
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NEW YORK – Wall Street stocks finished mixed on Wednesday, after the Federal Reserve maintained current interest rates
The Dow Jones Industrial Average dropped 0.7 per cent to 33,979.33.
The broad-based S&P 500 added 0.1 per cent at 4,372.59, while the tech-rich Nasdaq Composite Index climbed 0.4 per cent to 13,626.48.
The US central bank, as expected, opted to hold its benchmark lending rate between 5 per cent and 5.25 per cent. But forecasts from policymakers indicated strong support for two more hikes in 2023.
Major indices tumbled just after the policy statement was released but recovered somewhat later during Fed chairman Jerome Powell’s press conference.
Mr Powell described inflation as still too high, but added that the central bank had made no decisions yet about its July meeting or subsequent gatherings.
Oanda’s Mr Edward Moya characterised the decision as a “very hawkish skip”, adding that “the Fed is clearly worried that inflation might not be able to come all the way down to target”.
But Oxford Economics rated the Fed’s posture on additional interest rate hikes as likely a “bluff”, according to a note.
“If it isn’t a bluff, and the Fed continues to hike, that would increase the odds that the central bank pushes the economy into a recession,” Oxford Economics said in the note.
Analysts noted that the stock market had rallied ahead of Wednesday’s announcement in expectation of a Fed pause. That had set the market up for a potential pullback when the news was disclosed.
Futures markets currently are betting on a small interest rate increase in July, but not one after that. AFP
