On Wednesday afternoon, US markets surged following the Federal Reserve’s final policy decision of the year. The Dow climbed 1.4%, closing at 37,090.24, surpassing its previous peak set nearly two years ago at 36,799.65.
Similarly, the S&P 500 and Nasdaq each rose 1.4%, with Wall Street reacting positively to the Fed’s announcement of maintaining steady interest rates after nearly two years of aggressive hikes. The central bank also projected three rate cuts in 2024.
Wednesday’s rally boosted the Dow’s year-to-date gains to approximately 12%. The S&P 500, nearing a record high, has seen a 22.6% increase in 2023, while the Nasdaq Composite has surged more than 40% year-to-date.
According to Joseph Brusuelas, chief economist at RSM, the key takeaway from the December policy meeting is the Fed’s forecast of a controlled economic slowdown, achieving full employment, and plans to lower its federal funds rate by at least 75 basis points in 2024 to support ongoing business growth.
“In our view, this represents one of the best holiday gifts a central bank can provide to investors, policymakers, and the public,” he remarked.
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