The US markets climbed on Wednesday and S&P 500 snapped its first three-day losing run this year, after the Federal Reserve assured that it would continue to support the US economy. The Fed’s decision came after a review of the costs and benefits at the conclusion of a two-day Federal Open Market Committee meeting. Federal Reserve Chairman Ben Bernanke stated that the labor market is healing but the central bank will keep its aggressive easing stance until it is shown that the gains are durable. The Federal Reserve maintained its policies on bond purchases and record-low interest rates, projecting a return to moderate economic growth following a pause late last year. The Fed added that the economy is growing at a moderate pace but there are still downside risks to the outlook.
Besides, Bernanke stressed that the Fed is open to adjusting the size of the monthly purchases depending on the economic data. Bernanke has argued that aggressive easing is needed to bring down long-term unemployment and ending easing prematurely is a risk to the economy. The Fed also kept its federal funds rate target unchanged at a record low range of 0% to 0.25%, where it has been for over four years. The Fed made no changes to its forward guidance that it will not raise rates at least as long as the unemployment rate remains above 6.5% and inflation remains tame. The vote at the meeting was 11 to 1. Kansas City Fed President Esther George dissented for the second straight meeting.
The Dow Jones Industrial Average gained 55.91 points or 0.39 percent to 14,511.70, the S&P 500 added 10.37 points or 0.67 percent to 1,558.71 and the Nasdaq jumped 25.09 points or 0.78 percent to 3,254.19.
The Indian ADRs closed mostly in green on Wednesday, Infosys was up by 0.90%, Dr. Reddy’s Lab was up 0.34% and Wipro was up 0.05%. On the other hand, HDFC Bank was down 0.58% and ICICI Bank was down 0.03%.
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