Strong upward reaction on the Wall after the Fed decisions

LAST UPDATE 22:25

Key Wall Street indexes are gaining ground following the Federal Reserve’s decision to step up its anti-inflation efforts after consumer prices soared to near 40-year highs.

The central bank announced today that it will double the rate at which it reduces bond and other securities markets to $ 30 billion a month, in order to end the program in March 2022, instead of the June it had previously expected.

The faster withdrawal of the program paves the way for the central bank for more interest rate hikes next year. Forecasts released by the central bank showed that officials expect three rate hikes of 25 basis points at a time. The bank’s key interest rate is at a record low close to zero since March 2020.

In its latest fiscal forecast released after the monetary policy meeting, the central bank set inflation at 2.6% next year, up from 2.2% in September. It also sees a further decline in unemployment to 3.5%.

Indicators – Statistics

On the board, the industrial Dow Jones gained 334 points or 0.94% to 35,878.58 points, while the broader S&P 500 adds 62.74 points or 1.35% to 4,696.83 points. The Nasdaq technology is up 272 points or 1.79% at 15,510.47 points.

Of the 30 stocks that make up the Dow Jones industrial average, 16 are moving with a positive sign and 14 with a negative one. The biggest gains were made by Cisco Systems with gains of $ 1.55 or 2.68% at $ 59.32, followed by Merck at $ 74.81 with gains of 1.48% and UnitedHealth Group at $ 486.40. with an increase of 1.45%.

The three stocks with the biggest losses are American Express (-1.27%), Chevron (-1.20%) and Boeing (-2.54%).

At the end of the day, data released today on retail sales failed to confirm analysts’ estimates in a worrying indication that consumers may restrict their purchases amid the inflation rally.

In particular, the total value of retail sales increased by 0.3% in the previous month, after an increase of 1.8% in October, according to the upward revised measurement of the US Department of Commerce. It is noted that the average estimates of analysts in a Bloomberg poll spoke of an increase in sales by 0.8%.

More encouraging were the New York Fed data on manufacturing activity in the New York area.

In particular, the Empire State Manufacturing Index rose to 31.9 points in December from 30.9 points last month, disproving analysts’ forecasts that it would fall to 25 points in a Wall Street Journal poll.