The US market closed higher on Wednesday, in a volatile trading following the release of Federal Reserve meeting minutes where several Federal Reserve officials had favored a June rate hike. At the same time, others thought a rate hike wouldn’t be warranted until later in the year as low oil prices and the strong dollar would likely hold inflation down. Still, the hawkish tone at the meeting might not reflect the current thinking of US central bank officials in light of the weak March job’s report released two weeks after the Fed meeting. By a 10-0 vote, the Fed on March 18 voted to remove forward guidance that they would be patient on hiking rates allowing them to consider hiking rates on a meeting-by-meeting basis. Officials stated they would not hike in April but would move at any subsequent meeting when they had seen more improvement in the labor market and were reasonably confident that inflation will move higher. According to the minutes, two Fed officials thought the central bank should signal its intention to move at the meeting before the first rate hike, but others added that this would be inconsistent with a meeting-by-meeting approach.
Ahead of the release of the minutes, New York Fed President William Dudley suggested that the bar for raising rates in June is high, given recent signs of economic weakness. Also, Federal Reserve Governor Jerome Powell stated that he expects economic conditions to support a rate hike later this year. Powell added that he wasn’t troubled by equity valuations and that the Fed was unlikely to put its toe in the water and declare overly high stock prices to be a justification for a rate hike.
The Dow Jones Industrial Average added 27.09 points or 0.15 percent to 17,902.51, Nasdaq was up by 40.59 points or 0.83 percent to 4,950.82 while, S&P 500 was higher by 5.57 points or 0.27 percent to 2,081.90.
The Indian ADRs closed mostly in green on Wednesday; Dr. Reddy’s Lab was up 2.24%, Infosys was up 0.71% and ICICI Bank was up by 0.15%. On the other hand, Tata Motors was down 0.26% and HDFC Bank was down 0.08%.