Global shares were mostly flat while U.S. yields fell on Wednesday after the Federal Reserve delivered its 11th consecutive hike in interest rates aimed at reining in rising consumer prices.
The rate hike, which was in line market expectations, took the benchmark overnight interest rate to between 5.25% and 5.50% – the highest level since around the global financial crisis in 2007-2009.
The Fed also left open the door for more rate hikes, stating that it would keep studying economic data as it determines “the extent of additional policy firming that may be appropriate” to reach its 2% inflation target.
During his press conference, Fed Chair Jerome Powell said central bank staff are no longer forecasting a U.S. recession, and “we do have a shot” for inflation to return to target without high levels of job losses.
“It was exactly what the market was anticipating, almost like a non-event with markets dead flat,” said Lamar Villere, portfolio manager at Villere & Co in New Orleans.
“It’s our sense that the way inflation data has been coming in and the way the Fed has been slowing the pace of hikes, that they’re looking to stop,” Villere added
Gold prices gained buoyed by a pullback in the dollar and bond yields. Spot gold added 0.5% to $1,973.53 an ounce, while U.S. gold futures gained 0.50% to $1,968.90 an ounce.
