US stocks hit records as Federal Reserve confirms plan for 2024 interest rate cuts
- The US central bank kept rates unchanged on Wednesday, but also stayed the course in its forecast for 3 rate cuts this year
- Fed policymakers also updated their economic forecasts, sharply upgrading the US growth outlook for this year to 2.1 per cent
Major Wall Street indices surged to fresh records on Wednesday after the Federal Reserve reaffirmed plans for interest rate cuts in the coming months, cheering investors who had feared a retreat.
The US central bank as expected opted to keep interest rates unchanged for a fifth consecutive meeting. The Fed also stayed the course in its forecast for three rate cuts in 2024, despite recent inflation data that topped estimates.
“Inflation is still too high,” Fed Chair Jerome Powell told a news conference.
But despite the recent uptick, Powell said this year’s inflation data “haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward two per cent”.
Keeping the three rate cuts on the outlook allowed the market “to breathe a sigh of relief”, said Briefing.com analyst Patrick O’Hare, adding that investors also welcomed Powell’s characterisation of the economy as relatively strong.