One good deed deserved another Wednesday, financially speaking.
Not long after the Federal Reserve announced it was not only keeping interest rates where they are but could be cutting them next year, Wall Street sent the Dow Jones Industrial Average skyrocketing. The Dow set a record with its 512 point jump (1.4%), sending it above 37,000, passing its prior peak of 36,799.65 set last year, the Associated Press reported.
Other indexes of U.S. stocks – the S&P 500 rose 1.4% and neared its own record, and the Nasdaq gained 1.4% — likewise jumped.
All the excitement came as the Federal Reserve on Wednesday held its main interest rate steady at a range of 5.25% to 5.50%, as was widely expected, according to the AP. The Fed has raised that rate up from virtually zero early last year in hopes of slowing the economy and hurting investment prices by exactly the right amount in its effort to stifle the naggingly high inflation rate.
In a press conference Wednesday, Fed Chair Jerome Powell said its main interest rate is likely already at or near its peak.While acknowledging that the battle against high inflation is still ongoing, he also said Fed officials don’t want to wait too long before cutting the federal funds rate, which is at its highest level since 2001.
“We’re aware of the risk that we would hang on too long” before cutting rates, he said. “We know that’s a risk, and we’re very focused on not making that mistake.”
