Stock Markets across the World Rise after Federal Reserve Policy Announcement

Stock Markets across the World Rise after Federal Reserve Policy Announcement

Federal Reserve has held the interest ratesat record low and the stock markets across the world cheered the move from the U.S. authorities. The Federal Reserve policy meeting has given the required trigger to stock markets and investors for at least few more months, till the time next policy meeting is held. Stocks jumped in Hong Kong, Tokyo, India, Australia and the United Kingdom.

Dow Jones Industrial Average closed nearly a percent higher at 18,293. Nasdaq jumped over a percent to close at 5,295. Among major stock markets worldwide, Nikkei 225 was trading nearly two percent higher. FTSE opened a percent higher as stock markets worldwide showcased positive sentiments.

Federal Reserve indicated the possibility of a rate hike by the end of the year. However, that will also depend on economic indicators. Economic analysts are still divided on possibility of rate hike by the end of the year.

Bank of Japan also kept the rates at same level in its recent policy meeting. The Japanese stock market has registered two days of strong gains.

The Federal Reserve statement added, “The [Fed] 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.”

As per latest reports, 10 out of 17 officials expect the Federal Reserve to raise the rates by end of the year. This could lead to short selloff in the markets in December.

The next Federal Reserve policy meeting will be held on November 1-2. As the meeting is just before the presidential elections, the likelihood of rate change is very low in November. The rate hike could come in Federal Reserve’s mid-December policy meeting. Traders still have nearly three months before the next major move by the Federal Reserve.



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