In a decision that had investors on the edge of their seats, the Federal Reserve opted to press the pause button on their interest-rate hiking campaign, but not without a twist. While holding off on a rate hike for now, Fed policymakers made it clear that more hikes are on the horizon.
As the news unfolded, the stock market reacted with initial dips, only to recover some ground later. The S&P 500 (^GSPC) closed nearly unchanged, while the Dow Jones Industrial Average (^DJI) saw a decline of 0.8%, equivalent to a loss of 250 points. However, the tech-savvy Nasdaq Composite (^IXIC) managed to bounce back from its lows and ended the day with a modest 0.2% gain.
Looking ahead, the Federal Reserve’s officials predict two more rate hikes to take place later this year, emphasizing their confidence in the economy’s growth trajectory. Furthermore, Chair Jerome Powell dashed any hopes of rate cuts in the near future, providing clarity on the monetary policy outlook for the remainder of the year. Investors now brace themselves for the potential impact of these impending rate hikes.
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