US Stocks Jump as Fed Chief Calls a Rate Hike ‘Unlikely’

AFP/APP

New York: Wall Street stocks shot higher Wednesday afternoon after Federal Reserve Chair Jerome Powell said the central bank is “unlikely” to raise interest rates.

Major indices were up about one percent or more after Powell said the central bank’s next change would probably not be an interest rate increase. 

Near 1915 GMT, the Dow Jones Industrial Average was up 1.2 percent at 38,267.75.

The broad-based S&P 500 gained 1.0 percent to 5,085.42, while the tech-rich Nasdaq Composite Index jumped 1.5 percent to 15,896.06.

The Fed kept interest rates flat for the sixth straight meeting. The central bank’s prior outlook had projected three interest rate cuts in 2024.

But inflation has accelerated, throwing cold water on hopes of an early rate cut this year.

The central bank said it does not expect to cut rates until it has “greater confidence” that inflation is moving sustainably towards its two percent target.

Heading into Wednesday’s policy announcement, analysts had pointed to a hawkish comment on the likelihood of a rate hike as a potential risk for stocks.

However, Powell’s comment reassured investors that a rate hike is not likely, lifting equities.