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US markets end in red after Federal Reserve keeps interest rates steady

30 Jan 2025 Evaluate

The US markets ended in red on Wednesday after the Federal Reserve announced its widely expected decision to leave interest rates unchanged following its first monetary policy meeting of 2025. The Fed said it decided to maintain the target range for the federal funds rate at 4.25 to 4.50 percent in support of its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run. The decision to leave rates unchanged came as the Fed noted inflation remains somewhat elevated and reiterated its strong commitment to returning inflation to its 2 percent objective. Notably, the Fed removed a phrase included in previous statements indicating that inflation has made progress towards it target.

The Fed's latest decision comes after it lowered rates by a total of 100 basis points or 1.0 percentage point over the three previous meetings, beginning with a 50 basis point cut in September. The central bank's next monetary policy meeting is scheduled for March 18-19, when Fed officials will also provide their latest projections for rates, inflation and the economy. On the sectoral front, interest rate-sensitive housing stocks showed a significant move to the downside, dragging the Philadelphia Housing Sector Index down by 2.2 percent. Considerable weakness was also visible among telecom stocks, as reflected by the 1.5 percent loss posted by the NYSE Arca North American Telecom Index.

Dow Jones Industrial Average fell 136.83 points or 0.31 percent to 44,713.52, Nasdaq dropped 101.26 points or 0.51 percent to 19,632.32 and S&P 500 was down by 28.39 points or 0.47 percent to 6,039.31. 


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