US stocks deepen losses, close lower after Fed's projections

US stock indices fell on Wednesday, deepening losses following the US Federal Reserve’s projections to raise interest rates twice in 2023.

The US Federal Reserve decided to hold the interest rate between zero and 0.25% unchanged, and addressed the recent rise in inflation according to the recent economic data, as the Fed officials see that the rise in consumer prices is temporary.

The FOMC stated that it expects 2 interest rate hikes in 2023, and raised its forecast for US GDP growth this year to 7% from 6.5% in March.

Whilst the central bank kept its forecast for the US economy growth in 2022 at 3.3%, but raised its forecast for 2023 to 2.4% from 2.2%.

The Fed expects the personal consumption expenditures index (which the Fed uses to measure inflation) to rise by 3.4% in 2021 from 2.4%, and raised its forecast for 2022 and 2023 to 2.1% and 2.2% respectively.

The central bank projected that the unemployment rate will fall to 4.5% this year, and lowered its forecasts for it to 3.8% in 2022 from 3.9%.

Data showed that the US building permits index fell 1% in May to 1.68 million permits.

To the oil market, WTI crude July futures rose less than 0.1%, or 3 cents, and closed at $72.15 a barrel, after hitting a high of $72.9 and a low of $71.8.

Brent August futures rose 0.5% or 40 cents, and closed at $74.39 a barrel, after hitting a high of $74.9 and a low of $73.9.

As for stocks, Dow Jones fell 0.8% or 265 points, and closed at 34,033, with a day high of 34,333, and a low of 33,917.

Nasdaq fell 0.2% or 33 points to 14,039, with a high of 14,129 and a low of 13,990.

S&P 500 fell 0.5% or 22 points to 4,223, after hitting a high of 4,251 and a low of 4,202.