Fed Holds Steady: Market Watches for Rate Cut Hints
U.S. stocks edged higher as the Federal Reserve maintained interest rates. Investors dissected Chair Jerome Powell's statements for clues on future rate cuts, amid solid economic data and ongoing inflation. Earnings reports from major companies boosted market confidence despite tariff concerns impacting trade.
On a volatile trading Wednesday, U.S. stocks posted modest gains following the Federal Reserve's decision to keep interest rates unchanged, as anticipated. Market eyes turned keenly towards Federal Reserve Chair Jerome Powell's remarks, seeking indications on the timeline for potential rate cuts.
The central bank highlighted a low unemployment rate and robust labor market, alongside persisting inflation. The decision brought dissent from two governors, leaving uncertainty around future rate adjustments. Ahead of the Fed's announcement, markets showed slight optimism after data revealing stronger-than-expected economic growth, albeit with signs of underlying weakness.
Investors closely monitored Powell's comments for insights into policy direction, as the Federal Reserve faces both political pressures and tariff impacts on inflation. With a 68% likelihood of a September rate cut, traders adjusted expectations. Corporate earnings provided a bolstering effect, yet tariff issues persisted, with an executive order imposing additional tariffs on Brazil.
(With inputs from agencies.)
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