US stocks gain as Fed keeps rates unchanged

US stocks gain as Fed keeps rates unchanged

New York, Sep 22 (IANS) US stocks posted solid gains as the US Federal Reserve left its federal funds rate unchanged after the conclusion of its two day policy meeting.

The Dow Jones Industrial Average on Wednesday added 163.74 points, or 0.90 per cent, to 18,293.70. The S&P 500 leapt 23.36 points, or 1.09 per cent, to 2,163.12. The Nasdaq Composite Index increased 53.83 points, or 1.03 per cent, to 5,295.18, Xinhua news agency reported.

“The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives,” the Fed’s policy-making committee said in a statement released on Wednesday after its two-day meeting.

The Fed’s updated projections released Wednesday showed that policymakers expected the federal funds rate to rise to around 0.625 per cent at the end of 2016, implying one rate hike this year, down from two estimated in June.

The Fed also said in the statement that near-term risks to the US economic outlook “appear roughly balanced,” a further sign that the central bank could raise rates by the end of this year.

“The FOMC (Federal Open Market Committee) thinks another rate hike is needed soon, but participants’ thinking on the pace of tightening and ultimate level of rates when tightening is done continues to fall,” said Chris Low, chief economist at FTN Financial, in a note.

The Fed will hold its next two policy meetings on November 1-2 and December 13-14.

US dollar declines after Fed statement

New York, Sep 22 (IANS) The US dollar decreased against other major currencies as investors were digesting the latest Federal Reserve statement.

In the statement released on Wednesday after Fed’s two-day policy meeting, the US central bank decided to keep its federal funds rate unchanged amid recent weak economic data and tepid inflation, Xinhua news agency reported.

“The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives,” said the statement.

In late New York trading on Wednesday, the euro rose to $1.1173 from $1.1161 of the previous session, and the British pound rose to $1.2998 from $1.2975. The Australian dollar climbed to $0.7600 from $0.7550.

The dollar bought 100.59 Japanese yen, lower than 101.83 yen in the previous session. The dollar dipped to 0.9759 Swiss francs from 0.9790 Swiss francs, and it inched down to 1.3159 Canadian dollars from 1.3213 Canadian dollars.

The Fed also said that near-term risks to the US economic outlook “appear roughly balanced”, a sign that the central bank could raise rates by the end of this year.

The dollar index, which measures the greenback against six major currencies, was down 0.14 per cent at 95.881 in late trading.

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