FED holds rates steady, market likes it US stocks popped on Wednesday after the Federal Reserve held interest rates unchanged and stuck to its projection of three rate cuts this year.
The S&P 500 (^GSPC) rose 0.2% on the heels of a fresh all-time closing high for the benchmark on Tuesday. Meanwhile, the Dow Jones Industrial Average (^DJI) also popped 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) led the gains, rising more than 0.3%. All three of the major averages had been in the red at some point during the session prior the announcement.
Along with its policy announcement, the Fed released updated economic forecasts in its Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future.
Fed officials see the fed funds rate falling to 4.6% by the end of 2024. That suggests the Fed will cut rates by 0.75% this year. Notably, this falls in line with market pricing from investors entering Wednesday.
Bonds were little changed on the news. Yields on the 10-year Treasury (^TNX) were slightly lower at around 4.28%, after rising over 20 basis points in the past two weeks.