The US Federal Reserve (Fed) retained its interest rates in the 5.25 to 5.50% range on Wednesday, forecasting a drop to 4.6% by the end of 2024 and prompting a wave of optimism on the US stock market.
The New York Stock Exchange hit a record high, sending bond yields spiralling, while the Dow Jones industrial average jumped 1.40%, reaching over 37,000 points for the first time in history, and ending at 37,090.24 points.
The predominately technology-based Nasdaq rose by 1.29%, finishing on 14,720.66 points.
Lastly, the S&P 500 saw an increase of 1.37%, closing at 4,707.09 points.
The Fed also provided additional reason for optimism, announcing that inflation is expected to decrease at a slightly faster rate than previously forecasted, reaching 2.4% by the end of 2024.
This marks a subtle change from the former forecast of 2.5%, made in September. However, the desired level of 2.0% is not projected until 2026.
Growth forecasts have been slightly revised as well, rising for 2023 to 2.6%, compared to the previous expectation of 2.1%. However, a decline to 1.4% is envisioned for 2024.
