US Fed Meeting Highlights: FOMC leaves key lending rate unchanged, S&P 500 breaks above 5,200 for the first time

We will now wrap the blog. Good night, folks!

Federal Reserve Chair Jerome Powell will continue to seek confirmation inflation is moving closer to the central bank’s 2% target, even after a recent spate of hotter inflation readings, reported CNBC.

“The other thing is, in the second half of the year, you had some pretty low readings, so it might be harder to make that 12-month window forward,” Powell said.

“Nonetheless, we are looking for data that confirm the low readings that we had last year,” Powell continued. “And give us a higher degree of confidence that what we saw was really inflation moving sustainably down to 2%.”

Continued strength in the labour market wouldn’t be a reason to hold off lowering interest rates, said Federal Reserve Chair Jerome Powell, reported CNBC.

“Strong hiring in and of itself would not be a reason to hold off on rate cuts,” he said, adding that the job market by itself is not cause for concern around inflation. Earlier, Powell said an unexpected weakening in the labour market “could also warrant a policy response.”

Major inflationary data points — the consumer price index and personal consumption expenditure — rose for both January and February. Fed Chair Jerome Powell thinks this data is just further proof of inflation’s nonlinear path downwards, reported CNBC.

“I think they haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward 2%,” he said during a press conference on Wednesday afternoon. “We are not going to overreact to these two months of data, nor are we going to ignore them.”

Stocks rose Wednesday and the S&P 500 topped the 5,200 level for the first time ever after the Federal Reserve held rates at a 23-year high and maintained expectations for three cuts before the end of 2024, reported CNBC.

The S&P 500 and Nasdaq Composite gained 0.7% and 0.9%, respectively. The Dow Jones Industrial Average added 280 points, or 0.7%.

The major averages ticked higher Wednesday afternoon after the Federal Reserve issued its policy decision and rate forecast, reported CNBC.

The S&P 500 gained 0.3%, and the Nasdaq Composite jumped 0.5%. The Dow Jones Industrial Average advanced more than 140 points, or nearly 0.4%.

Fed Chair Jerome Powell said the central bank has not yet come to a decision on how to change the pace of its balance sheet reduction, but he noted that an adjustment isn’t far off, reported CNBC.

“The general sense of the committee is that it will be appropriate to slow the pace of run-off fairly soon, consistent with the plans we’ve previously issued,” Powell said.

Federal Reserve Board Chairman Jerome Powell reiterated on Wednesday that policymakers still intend to cut rates before the end of this year, assuming economic growth continues, reported CNBC.

“We believe that our policy rate is likely at its peak for this type of cycle and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialling back policy restraint at some point this year,” Powell said.

He also reiterated his confidence in the Fed’s target inflation rate of 2%.

The Federal Reserve on Wednesday held interest rates steady as expected but signalled that it still plans multiple cuts before the end of the year, reported CNBC.

Oil prices fell on Wednesday after hitting multi-month highs in the previous session, as investors braced for the U.S. Federal Reserve’s interest rate policy announcement later in the day.

Brent crude futures for May were down $1.39, or 1.59%, at $85.99 a barrel by 12:05 p.m. EDT (1605 GMT). US West Texas Intermediate futures for April delivery, which expire on Wednesday’s settlement, fell $1.80, or 2.16%, to $81.67.

The more active May WTI contract was at $81.22 a barrel, down $1.51 or 1.83%. Brent had settled at its highest since October 31 in the previous session at $87.38 a barrel, while WTI hit its highest since October 27 at $83.47.

European markets moved slightly higher Wednesday as investors awaited the latest monetary policy decision from the US Federal Reserve, reported CNBC. The pan-European Stoxx 600 was up 0.05% in afternoon deals, with sectors trading in mixed territory. Household goods were down 1.5%, while chemicals stocks were up 1%.

US stocks opened flat Wednesday as investors awaited the latest Federal Reserve policy decision, reported CNBC. The Dow Jones Industrial Average and the S&P 500 were little changed in early deals, while the Nasdaq fell 0.1%.

Gold was little changed on Wednesday as traders waited for the Federal Reserve’s interest rate signals at the end of the US central bank’s meeting and Chair Jerome Powell’s remarks later in the day. Spot gold hovered around $2,156.60 per ounce by 10:49 a.m. EDT (1449 GMT). US gold futures were also steady at $2,159.80.

Energy and healthcare stocks lagged during early morning trading, dragging down their respective S&P 500 sector by about 0.4%, reported CNBC.

Halliburton and Hess Corp were the worst performers in the energy sector, slipping more than 1% each. Diamondback Energy and Chevron
also declined about 1% each.

Oil prices fell on Wednesday after hitting multi-month highs in the previous session, as investors braced for the U.S. Federal Reserve’s interest rate policy announcement later in the day.

Brent crude futures for May were down $1.20 or 1.4% at $86.18 a barrel by 1425 GMT. US West Texas Intermediate futures for April delivery, which expire on Wednesday’s settlement, fell $1.49 or 1.8% to $81.98.

The more active May WTI contract was at $81.45 a barrel, down $1.28 or 1.6%. At their intra-day low, the contracts were trading more than $1 lower than the previous settlement, but analysts still viewed the market as strong.