Stocks hit fresh records after the Fed says it will taper with the pandemic stimulus
The stock market shook off earlier losses and yet again rallied to new highs Wednesday, after the Federal Reserve said the economy was strong enough for the central bank to begin reducing the historic level of stimulus it has been providing markets since the Covid-19 pandemic began.All three major indexes were in the red before the Fed announcement but turned positive on the news, closing at a record for the third day in a row: The Dow Jones Industrial Average rose 0.
The central bank unsurprisingly left interest rates unchanged, while also admitting that economic growth slowed in the third quarter due to supply chain constraints and inflation, which Fed Chairman Jerome Powell said will likely last until mid-2022. Fed officials also clarified their stance on inflation, which remains near 30-year highs, saying that it is “expected to be transitory.”after its results missed expectations and the company said it would fold its home-flipping business.Despite the Fed’s assurance that it’s “transitory,” inflation fears have risen in the past few weeks, with the market already pricing in several rate hikes for early 2022.
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