Stocks Bounce Back After Fed Rate Hike
Stock markets rallied on Thursday after the US Federal Reserve raised interest rates as expected to combat inflation pressures. The rate hike, which was the first in three years, defied President Donald Trump's demand for cuts.
The Fed's chairman, Kevin Warsh, emphasized that the fight against inflation is far from over and that further tightening is likely necessary before the end of the year.
Investors took some comfort from the Fed standing firm in the face of Mr. Trump's demands, with Susannah Streeter, chief investment strategist at Wealth Club, saying 'investors took some comfort from the Fed standing firm in the face of Donald Trump's noisy demands for lower rates.'
The rally was also supported by falling oil prices, which dropped sharply early in the day before staging a partial recovery. Brent oil futures finished down 1% at $104.82 per barrel.
The Bank of England kept its benchmark interest rate steady as expected, while the Bank of Japan is widely forecast to raise interest rates on Friday to fend off high inflation and a weaker yen.