Wall Street edges higher as Fed unveils anticipated bond-buying taper



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Wall Street edges higher as Fed unveils anticipated bond-buying taper

On Wednesday, all three key indices of Wall St. had eked out modest gains as the US Federal Reserve had unveiled its much-anticipated bond-taper program. In point of fact, in the day’s decent gains in the Wall Street were almost entirely prompted by the November US Fed policy meet, which had underpinned optimisms of a robust recovery in US economic growth over coming months, however, the US Fed also had suggested that a latest leg of inflation-surge would be ‘transitory’ while offsetting market participants’ angsts over a plausible rate-hike in a near-term.

On top of that, US Fed Chair Jerome Powell was quoted saying in a press briefing shortly after the two-day long policy meet that the US economy would more likely to reach full employment by mid-2022, adding to investors’ optimism, while ISM said earlier in the day that its index for US national non-manufacturing activities had soared to a record peak in October, feathering up hopes of a jubilant labour market growth in a near-term outlook.

Nonetheless, Wall Street bellwether S&P 500 came into an affirmative territory after US Federal Reserve had told in a statement late in the day that it would begin to taper its $120 billion monthly bond repurchase program as early as by this month, however, the US Central Bank had held on to its near-zero benchmark borrowing cost and signalled that a rate-hike would not come into action until US Fed’s key inflation indicator, core PCE (Personal Consumption Expenditure) price Index, had been whirled down to 2.0 per cent.

Wall St. ends modestly higher as US Fed unveils bond-taper

Citing statistics, in the day’s Wall St. wind-down, trade-sensitive Dow added 0.29 per cent to 36,157.58 and benchmark S&P 500 gained 0.65 per cent, while tech-heavy Nasdaq composite jumped as much as 1.04 per cent to 15,811.58.

Meanwhile, addressing to a dovish US Fed, a chief market strategist at LPL Financial, Ryan Detrick said, “The Fed did not rock the boat on this one. It was fairly well-telegraphed what the Fed might do and they did what most people expected”.