Stock prices rose on Wall Street on Wednesday, after the US central bank, as expected, cut interest rates for the third time this year and raised its estimate of economic growth next year.
The Dow Jones rose 1.05 percent, to 48,057 points, while the S&P 500 gained 0.67 percent, to 6,886 points, and the Nasdaq index 0.33 percent, to 23,654 points.
At the long-awaited session, Fed leaders decided yesterday to reduce interest rates by a further 0.25 percentage points, to a range from 3.50 to 3.75 percent.
The third interest rate cut since September was expected by the market, as is the expectation that the Fed will continue easing monetary policy next year, reports Hina.
However, according to the Fed leader’s estimates, next year interest rates will be reduced only once by 0.25 percentage points because inflation is still moving well above the target levels of around 2 percent.
On the other hand, the leaders of the Fed increased the estimates of the growth of the American economy in the next year from 1.8 to 2.3 percent, and they also estimate that the unemployment rate will be 4.4 percent at the end of next year.
At the press conference, Fed President Jerome Powell did not reveal whether interest rates will be further reduced soon, but investors hope so, given that Powell pointed out that there is a significant risk to the labor market and that the central bank does not want to slow down employment with its monetary policy.
And on most European stock markets, which were closed before the Fed’s announcement, share prices fell slightly yesterday.
However, the London FTSE index strengthened by 0.14 percent, to 9,655 points, but the Frankfurt DAX weakened by 0.13 percent, to 24,130 points, and the Paris CAC by 0.37 percent, to 8,022 points.
