The Dow Jones index reached a record after the Fed’s rate decision – Kommersant
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Based on the results of yesterday’s stock trading in the US, the Dow Jones index increased by 1.4%, thereby reaching a record value of 37,090 points. The current growth of the Dow Jones is due to the fact that the US Federal Reserve following its December meeting abstained from raising the rate, keeping it at the level of 5.25–5.5%. Other major US indices – the S&P 500 and NASDAQ – also rose almost 1.4%.
Although the Fed has not given clear signals about the future of the rate, experts view yesterday’s decision as the completion of a cycle of hikes that began in March 2022. Investors now expect the Fed to pursue a looser policy to combat inflation, which should lead to a slowdown in economic growth and avoid a recession. On Tuesday, inflation data was published in the United States: consumer prices in November rose by 3.1% in annual terms, thereby the inflation rate slowed down slightly compared to October (3.2%).
“A mild slowdown in economic growth (instead of a recession.— “Kommersant”) is now guaranteed. Inflation has been slowing over the past few months and the possibility of a recession is no longer on the table. Barring some new catastrophe, the economy has done the impossible,” said Claudia Sahm, founder of the consulting company Sahm Consulting and a former Fed economist.
The previous Dow Jones record of 36,799 was reached in January last year, before the Fed began raising rates. In the next almost two years, volatility in the markets was very high, both due to the Fed rate increase, and because of geopolitical tensions, high inflation, fears about a possible recession, etc. Thus, in September 2022, the Dow Jones reached lowest point in the last two years, falling 22% from its record high earlier that year.
About the results of the December meeting of the US Federal Reserve – in the material “Kommersant” “Prepare your sleigh for summer”.
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