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U.S. stocks trade higher after Fed report

Xinhua,February 24, 2018 Adjust font size:

NEW YORK, Feb. 23 (Xinhua) -- U.S. stocks traded higher on Friday, as investors digested the central bank's newly-released monetary policy report.

At midday, the Dow Jones Industrial Average gained 191.52 points, or 0.77 percent, to 25,154.00. The S&P 500 increased 25.16 points, or 0.93 percent, to 2,729.12. The Nasdaq Composite Index was up 64.56 points, or 0.90 percent, to 7,274.65.

The Federal Reserve released its semiannual monetary policy report on Friday morning. According to the report, the policy makers reaffirmed their position in raising interest rates gradually.

Inflation on a 12-month basis is expected to move up this year and to stabilize around the 2 percent objective over the next few years, the report said.

While the report showed the Fed is watching the inflation situation closely, it also said that pressures don't seem to be coming from wage gains described as "moderate."

Earlier this month, a stronger-than-expected jobs report which showed surprisingly large wage increases triggered Wall Street's concern about higher inflation that would lead to faster interest rate hike paces from the Fed.

However, the Fed's preferred measure of inflation, the personal consumption expenditures index, still shows inflation running considerably below the 2 percent target.

In financial markets, the report noted that valuations are still high even with recent market sell-off that took major stock indices into correction territory, with more than 10 percent losses each.

The report served as a blueprint for the new Fed Chair Jerome Powell's testimony next week.

The market has been closely following any update coming out from the Fed.

On Wednesday, the U.S. central bank released minutes from its January meeting. According to the minutes, the Fed officials see increased economic growth and an uptick in inflation as justification to continue to raise interest rates gradually.

After the news came out, the U.S. 10-year Treasury yield spiked to as high as 2.956 percent. Major stock indices rose sharply with the Dow jumping more than 300 points before paring gains completely. Enditem

 

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