FOMC Acknowledges Growing Inflation Ending Crisis-Era Guidance
$DIA, $SPY, $QQQ, $RUTX, $VXX
The Fed raised it overnight fed funds rates Wednesday shifting from policies used to battle the 2007-2009 financial crisis and recession.
In raising its benchmark overnight lending rate a 1/4 bpt to a range of between 1.75 and 2%, the FOMC dropped its pledge to keep rates low enough to stimulate the economy “for some time” and signaled it would tolerate above-target inflation at least through Y 2020.
The Fed has raised rates 7X since late Y 2015 on the back of the economy’s continuing expansion and solid job growth, rendering the language of its previous policy statements outdated.
Inflation is also snapping into line, with fresh projections from policymakers on Wednesday indicating it would run above the central bank’s 2% target, hitting 2.1% this year and remaining there through Y 2020.
FOMC policymakers projected a slightly faster pace of rate increases in the coming months, with 2 additional hikes expected by the end of this year, compared to 1 previously.
They see another 3 rate increases next year, a pace unchanged from their prior forecast.
Wednesday, the major US stock market indexes finished at: DJIA -119.53 at 25201.20, NAS Comp -8.09 at 7695.71, S&P 500 -11.22 at 2775.63
Volume: Trade on the NYSE came in at 959-M/shares exchanged
- NAS Comp +11.5% YTD
- Russell 2000 +9.2% YTD
- S&P 500 +3.8% YTD
- DJIA +2.0% YTD
HeffX-LTN overall technical outlook for the US major stock market indexes is Bullish.