US stocks open sharply lower after Fed decision

New York, Sep 18 (IANS) US stocks opened sharply lower Friday as investors were assessing the impacts of the Federal Reserve’s decision to leave short-term interest rates unchanged.

With no major economic report due out on Friday, Wall Street was still sifting through the Fed statement released after a two-day monetary policy meeting on Thursday afternoon.

According to the statement, the Federal Open Market Committee (FOMC) would assess both realised and expected progress toward its objective of maximum employment and 2 percent inflation in its consideration of when to raise the benchmark interest rate.

Fed officials expected the recent global financial market volatility and slower global growth will further put downward pressure on inflation level, while the US economic outlook remains stable.

Most Fed officials still expect a first rate increase this year, Fed chairwoman Janet Yellen said at the press conference Thursday, noting that 13 out of 17 Federal Reserve Board members and Federal Reserve Bank presidents are looking for a move in 2015.

She reiterated that market should pay less attention to the timing of the first interest rate hike and more attention to the expected path of rates.

“The stance of monetary policy will likely remain highly accommodative for quite some time after the initial increase in the federal funds rate,” said Yellen.

Some analysts thought that fears about global growth set the tone after the Fed delayed normalising interest-rate policy.

Shortly after the opening bell, the Dow Jones Industrial Average dipped 187.60 points (1.13 percent), to 16,487.14. The S&P 500 lost 18.05 points (0.91 percent), to 1,972.15. The Nasdaq Composite Index moved down 60.85 points (1.24 percent), to 4,833.10.

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