NEW YORK, New York – Wall Street sprang a surprise rebound on Wednesday despite an aggressive hiking of interest rates by the Federal Reserve, and a revision down of forecasts for economic growth.
The Fed increased its benchmark interest rates 75 basis points on Wednesday, the biggest hike in 28 years.
At the same time, the 2.8 percent GDP forecast for 2022 was revised down to 1.7 percent.
“Clearly, today’s 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common,” Federal Reserve Chairman Jerome Powell said Wednesday.
“We want to see progress. Inflation can’t go down until it flattens out. If we don’t see progress … that could cause us to react. Soon enough, we will be seeing some progress,” he said.
Despite the rate hike and change in the economic outlook, investors were inspired enough to send the Nasdaq Composite out 270.81 points or 2.50 percent higher at 11,099.15.
The Dow Jones industrials added 303.70 points or 1.00 percent to 30,668.53.
The Standard and Poor’s 500 climbed 59.51 points or 1.46 percent to 3,789.99.
On foreign exchange markets, profit-takers creamed the dollar pushing the euro higher to 1.0453 by the New York close Wednesday. The British pound surged to 1.2179. The Japanese yen rose to 133.73. The Swiss franc firmed to 0.9966.
The Canadian dollar cruised to 1.2894. The Australian dollar was sharply higher at 0.7007. The New Zealand dollar gained to 0.6297.
On overseas equity markets, the CAC 40 in Paris, France advanced 1.35 percent. The Greman Dax was up 1.35 percent. London’s FTSE 100 gained 1.20 percent.
In Japan, the Nikkei 225 was down 303.70 points or 1.14 percent at 26,326.16.
The Australian All Ordinaries slumped 95.40 points or 1.39 percent to 6,785.80.
In New Zealand, the S&P/NZX 50 declined 5.44 points or 0.05 percent to 10,635.92.
South Korea’s Kospi Composite slid 45.59 points or 1.83 percent to 2,447.38.
Going against the trend, the Shanghai Composite in mainland China advanced 16.50 points or 0.50 percent to 3,305.41.
In Hong Kong, the Hang Seng gained 240.22 points or 1.14 percent to 21,308.21.