Wall Street rose on Wednesday after the US Federal Reserve said it would leave its key interest rate on hold until 2024 despite upgrading its economic forecasts for 2021, including a noticeable jump in inflation.
The central bank acknowledged the positive impact of stimulus measures from the Biden administration in lifting forecasts for growth, employment and prices (see separate story).
The S&P 500 and Dow closed at record highs on Wednesday after as investors reacted positively to the forecast rise in core inflation to 2.4% this year, before easing in 2022.
The Dow rose 0.58% to end at 33,015.37 points, while the S&P 500 was up 0.29% at 3,974.12. The Nasdaq Composite climbed 0.4% to end at 13,525.20 but remains down about 4% from its February 12 record-high close.
Wall Street’s positive reaction however didn’t flow through to ASX futures which eased to close down 7 points – pointing to a weak start for the local market today (Thursday).
Gold ended higher with Comex futures up 0.8% at 7am to $US1,744.20.
Comex copper and silver also finished higher going into Asian market trading. Iron ore prices eased with 62% Fe fines delivered to northern China (the key indicator product) losing 13 cents to $US166.19 cents, according to MB Fastmarkets.
Following the Fed’s statement, the yield on 10-year Treasury bonds eased lower to around 1.6374%. That was after touching a day’s high of 1.68% before the Fed statement.
Yields then eased to around 1.646% through the media conference by Fed chair, Jay Powell where he repeated the message that the Fed was not for turning.
The US dollar weakened slightly – that saw the Aussie dollar regain the78 US cent level and stay there.
