US stock markets are poised to open higher following the Federal Reserve’s decision to maintain interest rates, easing concerns about imminent hikes.
Despite Federal Reserve Chairman Jerome Powell acknowledging that persistent inflation delays anticipated rate cuts in the US, he dismissed the possibility of further rate increases.
According to the CME FedWatch tool, money markets are forecasting a 58% likelihood of a rate cut by September, increasing to a 69% probability by November.
Preston Caldwell, Chief US Economist at Morningstar, commented on the situation:
The Fed’s recent statement recognized a ‘lack of further progress’ on reducing inflation in recent months.
However, Powell confidently stated that the existing monetary policy is restrictive enough to eventually bring inflation down to the Fed’s 2% target, making a rate hike unlikely as the next step.
Following the Fed’s announcement, US stocks initially climbed but closed mixed on Wednesday.
In premarket activity, the Dow Jones Industrial Average rose by 0.4%, the S&P 500 increased by 0.6%, and the Nasdaq 100 gained 0.9%.
