The Dow Jones Industrial Average rose 2.1%, while the S&P 500 advanced 2.25%. The Nasdaq Composite rose 2.3%.
Rate-sensitive bank stocks added 0.8%, while mega-caps like Amazon.com Inc, Tesla and Nvidia fell, putting pressure on the Nasdaq.
This afternoon, the United States Federal Reserve (FED) decided to increase reference interest rates by half a pointthe first increase of this magnitude since 2000, and placed them in a range of between 0.75-1% to try to stop the escalation of inflation.
The official statement issued at the end of a two-day meeting of the Federal Reserve Monetary Policy Committee (FOMC) announced that in the near future “further increases in the rate that regulates the cost of money.
Besides, The agency will begin to reduce its holding in bonds from June and warned that the war in Ukraine and the confinements in China aggravate inflation.reported the AFP agency.
For the FED, inflation will gradually return to the 2% target that the agency gave itself as the cost of credit rises. They said they will remain “very attentive to inflation risks.”
The FOMC also noted the “highly uncertain” impact of external factors, including the Russian invasion of Ukraine that is “creating additional pressure on inflation and will weigh on economic activity.”
China’s lockdowns to combat covid “are likely to increase supply chain disruptions,” he added.
The reduction of its assets will mean the release of US$ 47,500 million in bonds and titles per month as of June 1, to double the figure after three months.
The Fed accumulated US$9 trillion in Treasury bonds and other securities among its assets, as a way to inject liquidity into the financial system during the pandemic.
Source: Ambito
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