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Wall Street Close: Markets bid on a steady hand from the Fed

  • The Dow ended around 12 points higher, up less than 0.1%, near 28,735.
  • The S&P 500 SPX, -0.09% fell around 3 points to end near 3,273.
  • Nasdaq Composite gained around 5 points, or 0.1%, to close near 9,275.

US benchmarks were ending the day mixed mid-week following a steady hand and guidance at the Federal Reserve, albeit with plenty of concerns still circulating around the coronavirus. The S&P 500 was closing with a small loss while both Dow Jones Industrial Average and Nasdaq Composite were eking out small gains.

The Federal Reserve was leaving rates on hold but signalled that it was staying vigilant of both the coronavirus and various global matters and saying watchful of "incoming data including Global developments in muted inflation pressures." 

Subsequently, the Dow ended around 12 points higher, up less than 0.1%, near 28,735, according to preliminary figures. The S&P 500 SPX, -0.09% fell around 3 points to end near 3,273, while the Nasdaq Composite COMP, +0.06% gained around 5 points, or 0.1%, to close near 9,275.

Fed highlights

The most dovish thing that Governor Jerome Powell said in the presser was how uncomfortable he is with inflation persistently below 2%.

  • Powell speech: Fed is not satisfied with inflation running below 2% and it is not a ceiling

  • Although, prior:  Powell speech: Fed expects inflation to move closer to 2% over the next few months

FOMC keeps rates unchanged

  • Target rate remains at 1.5% to 1.75%.
  • Interest rate on excess reserves 1.6% versus 1.55%.
  • The decision is unanimous.
  • Fed says labor market stronger, economy rising at moderate rate.
  • Consumption moderate, investment and exports week.
  • Job gains solid, unemployment has remained a low.
  • Overall and core inflation running below 2%.
  • Fed leaves discount rate at 2.25%.
  • Market-based gauges of inflation compensation remain low.
  • Aims for inflation returning to symmetric 2% goal.
  • Reiterates plan to buy treasury bills into 2nd half of 2020.
  • Continue to conducting Terman overnight repo operations at least through April.
  • Survey based inflation expectations a little changed.
  • Current policy appropriate to sustain expansion.
  • Will continue to monitor incoming data including Global developments in muted inflation pressures.

Dow levels

 

 

 

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