The S&P 500 it rose to an all-time high on Wednesday, following the FOMC’s remarks. The Fed, as expected, left rates unchanged and remained committed to its bond purchase program. It is clear that the Fed sees that the economy is recovering, but it has some time left before a pullback from support is warranted.
The Fed says the US economy is still a long way from full employment and that any inflationary effects are likely to be transitory. Some sectors affected by the pandemic are still weak but improving.
The Fed also said again that it has no problem if inflation exceeds its 2% target for a short period, as it continues to focus on a return to strong economic growth and full employment.
Market reaction
The S&P 500 rose to an all-time high of 4,201 during Wednesday’s session, continuing a record-setting streak of records! Risk appetite is the order of the day as the Fed continues to do its best to support the US economic recovery The US 10-year yield falls below 1.63%, with a 1.66% increase right after the Fed rate decision.
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