Global stocks rise after Fed holds off interest rate hike

Sep 25, 2016, 01:24
Global stocks rise after Fed holds off interest rate hike

In a statement from the Federal Open Market Committee after this week's meeting, the central bank expressed confidence in economic growth, but not enough to make a move this month, CNBC writes.

The Federal Reserve expressed growing confidence in the health of the US economy Wednesday but still declined to raise interest rates, declaring that the case for an increase "has strengthened" but that it would wait "for further evidence of continued progress" toward higher growth and faster inflation.

KEEPING SCORE: France's CAC 40 rose 2 percent to 4,498 and Germany's DAX added 1.9 percent to 10,636.

FED WATCH: The Federal Reserve kept its key interest rate unchanged and signaled it is likely to raise it later this year.

America's job market "has continued to strengthen", Fed officials said in a written statement, "and the growth of economic activity has picked up from the modest pace seen in the first half of the year". It was the first time it has used that wording since late previous year, when it most recently raised rates.

"The committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives".

The Fed's statement Wednesday was issued hours after the Bank of Japan, struggling to rejuvenate an ailing economy, set a more ambitious goal for raising inflation and announced steps meant to raise the profitability of financial firms. The bank said it will keep stimulating the world's third-largest economy until inflation is higher than 2 percent.

Faucher said Kentucky should see slightly faster growth next year than the nation as a whole, though the state's median household income will continue to lag the national average, in part because of a lower concentration of high-paying, high-tech jobs and a lower share of residents with college degrees.

On Wall Street, the S&P 500 Index gained 0.65 per cent, led by a 1.9-per cent gain for the real estate sector.

While Tokyo was on holiday on Thursday, stocks closed up 1.9 per cent on Wednesday after the BOJ's shift to targetting a positive yield curve, a move that was considered bullish for banks, insurers and pension funds.

Ahead of the decision, MSCI's broadest index of Asia-Pacific shares outside Japan was flat, perched at its highest levels since September 12. In commodities, the brighter mood on risky assets saw US crude oil futures up 1.8 percent to $46.71 a barrel.

The 10-year U.S. Treasuries yield dropped to as low as 1.608 per cent on Friday, down from Wednesday's high of 1.738 per cent and hitting its lowest in two weeks.

Oil prices jumped after a third surprise weekly drop in U.S. crude stockpiles helped assuage fears over a global glut.

The dollar fell more than one per cent against the yen to 100.56 yen in early North American trading, its lowest since August 26.

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