Global stocks fluctuate after Fed rate hike, dollar rises, treasuries slip
Dow Jones Industrial Average climbed within 40 points of 20,000. The Bloomberg Dollar Spot Index added 0.3%, while yields on 10-year Treasuries climbed to 2.49%
The dollar rose and Treasuries slipped the Federal Reserve raised interest rates and signaled a steeper path for borrowing costs in 2017. U.S. stocks fluctuated near all-time highs.
The S&P 500 Index swung between gains and losses as of 2:07 p.m. in New York. The measure had rallied 6.2 percent since Donald Trump’s surprise election through yesterday. The Dow Jones Industrial Average climbed within 40 points of 20,000. The Bloomberg Dollar Spot Index added 0.3 percent, while yields on 10-year Treasuries climbed to 2.49 percent.
The Federal Open Market Committee cited “realized and expected labor market conditions and inflation" in increasing its benchmark rate a quarter percentage point, according to a statement Wednesday following a two-day meeting in Washington. New projections show central bankers expect three quarter-point rate increases in 2017, up from the two seen in the previous forecasts in September, based on median estimates.
The Fed’s path to tighter monetary policy has been delayed throughout 2016, as first instability in Chinese markets, then the shock votes for Brexit and Trump, put policy makers on the defensive. After Wednesday, traders see a two-in-three chance of additional rate increases from the Fed by June, futures show.
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