[NEW YORK] Wall Street stocks rose on Wednesday (Mar 19) after the Federal Reserve kept interest rates unchanged but pointed to increased economic uncertainty, while Treasury bond yields tumbled.
The Fed’s interest rate decision was expected, but the central bank cut its growth forecast for 2025 and hiked its inflation outlook.
It has nonetheless still pencilled in two rate cuts this year.
But yields on the 10-year US Treasury note, a closely-watched proxy of monetary policy, fell sharply as the Fed also slowed the pace at which it will shrink the size of its balance sheet.
The Dow Jones Industrial Average finished up 0.9 per cent at 41,964.63.
The broad-based S&P 500 gained 1.1 per cent to 5,675.29, while the tech-rich Nasdaq Composite Index jumped 1.4 per cent to 17,750.79.
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“Uncertainty today is unusually elevated,” Fed chair Jerome Powell told reporters after the decision was published, adding that at least part of a recent inflation uptick was related to the White House tariff policies.
But Powell also communicated some confidence about the US economic outlook, noting key indicators that have stayed solid in spite of surveys showing weakening consumer confidence.
“I think the market liked hearing the Fed chair sound reasonably upbeat about the economy,” said Briefing.com analyst Patrick O’Hare, who noted that the drop in Treasury yields boosts expectations that mortgage rates also will fall.
Among individual companies, Boeing jumped 6.8 per cent as CFO Brian West told a Wall Street conference the company’s efforts to improve plane assembly operations were on track so far in the first quarter and struck an upbeat tone on the company’s outlook.
General Mills fell 2.1 per cent after reporting a five per cent drop in sales as it pointed to a slowdown in demand for snacking and a drop in orders from retailers managing inventories. AFP
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