Stocks soared Wednesday after Fed Chair Jerome Powell said a 75-basis-point rate hike isn’t on the table.
The remark followed a half-point hike to a range of 0.75%-1% that marked the biggest increase since 2000.
The Fed also detailed plans to shrink its balance sheet, eventually ramping up to a reduction of $95 billion a month.
US stocks soared after Federal Reserve Chairman Jerome Powell said the central bank’s half-point rate hike on Wednesday wouldn’t be followed by bigger increases in upcoming policy meetings.
“A 75-basis-point increase is not something the committee is actively considering,” he said during a briefing.
That came after the Fed met widely held expectations for a 50-basis-point hike that marks the biggest increase since 2000. Benchmark rates will go up to a range of 0.75%-1%, adding to the Fed’s quarter-point increase in March that kicked off the first tightening cycle in four years.
The central bank also detailed plans to shrink its balance sheet, eventually ramping up to a reduction of $95 billion a month.
Here’s where US indexes stood at the 4:00 p.m. market close on Wednesday:
But Wall Street is also worried about the Fed’s ability to engineer a “soft landing” that doesn’t sink the economy, which has shown evidence of strain lately.
ADP said Wednesday that private employers in the US added 247,000 jobs in April, significantly less than the 395,000 expected in a Bloomberg survey of economists. April’s figure reflects slower growth from March and marks the smallest monthly gain since August.