Once the Federal Reserve (Fed) did raise interest rates and presented a more aggressive plan in tackling rising inflation, major Wall Street indices and U.S. treasury yields skyrocketed.
As expected, the Fed announced a quarterly percentage point increase at the FOMC meeting earlier this morning, further supporting the key benchmark up from zero which is the first rate hike since 2018.
According to Ryan Detrick, head of market strategy at LPL Financial North Carolina, the Fed met market expectations by lowering GDP forecasts and updating inflation expectations.
The US 10 -year yield benchmark rose 2.246% before retreating to 2.192% following the Fed’s announcement of expectations to begin settling large holdings of government bonds and mortgage -backed securities at its next meeting.
The 2 -year yield note rose 2.002%, further flattening the yield curve.
The Dow Jones Industrial average rose 1.55% at 34,063.1, the S&P 500 hit 2.24% at 4,357.86 and the Nasdaq Composite added 3.77% at 13,436.55.
Gains on these key indices were supported by surges in stocks in the technology, finance and consumer discretionary sectors.
Meanwhile, the Fed’s presentation on more hawkish monetary policy failed to stimulate the momentum of dollar movements, with the dollar index declining 0.6% after hitting 3% in February and 10% since May last year.
Other global stock markets closed higher with investor sentiment seen recovering following positive peace dialogue results and the Chinese government promising more economic stimulus.
The pan-European STOXX 600 index was up 3.06% while MSCI’s worldwide benchmark was up 2.76%.
In commodity markets, benchmark Brent oil closed 1.9% lower at $ 98.02 a barrel while US West Texas Intermediate (WTI) crude fell 1.5% at $ 95.04 a barrel.
Gold jumped 0.5% at $ 1,926.57 per ounce while US gold futures declined 1.02% at $ 1,908.90 per ounce.
