Stocks initially swayed after the announcement. Later, Indices stabilized and rose more than 2.5% after Chairman Jerome Powell’s news conference.
The Federal Reserve raised its benchmark interest rate on Wednesday and said it would start cutting the central bank’s $9 trillion asset portfolio next month in an effort to curb inflation.
Thus, the US central bank fixed its interest rate between 0.75% and 1% in a unanimous decisionlikely to be followed by further increases in borrowing costs of perhaps similar magnitude.
Greg Bassuk, CEO of AXS Investments in Port Chester, New York, said “it is clear that they (the Fed) understand the need to contain the rise in prices” adding “even as the Fed gets more aggressive with rate hikes, we still have to deal with geopolitical tension, the Covid-19 issues, as well as these far-reaching corporate earnings results. So despite the Fed move, we think we’ll still see some more volatility.
“Concerns about the impact on economic growth due to the Fed’s stance, mixed earnings from some big growth companies, the conflict in Ukraine, and pandemic-related lockdowns in China have hit Wall Street recently, and growth stocks carried most of the selling,” the traders said.
Source: Ambito
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