Wall Street gains ground as markets assess Fed rate decision

US stock indices rose on Thursday after the release of positive US data while markets assess the Fed's policy decisions.

The Fed

The Fed announced a 0.25% hike in interest rates to below 5%.

It's the ninth rate hike in a row since the starting the current cycle of policy tightening in March 202

The Federal Reserve asserted the US banking system remains strong and sound, and that recent developments will likely lead to stricter crediting criteria for individuals and corporations, which might impact growth and inflation.

The Federal Open Market Committee will continue to monitor data and the impact of the monetary policy, with the aim of bringing inflation back to the 2% target.

The Fed cut its growth forecasts for the this year and the next, while expecting one more rate hike this year.

The Fed expects the US GDP to grow by 0.4% this year, down from 0.5% in previous forecasts, while cutting 2024 growth forecasts from 1.6% to 1.2%, but raised 2025 forecasts from 1.8% to 1.9%.

The Fed also cut unemployment forecasts for this year from 4.6% to 4.5%, but maintained 2024 forecast at 4.6%.

And finally, the Fed held its forecasts for interest rates this year at 5.1%, pointing to one more rate hike this year.

Powell

Fed Chair Jerome Powell said the Fed will do whats "necessary" to bring inflation back to 2%, with another rate hike if needed.

Powell said US growth was impacted by higher interest rates, while the labor sector remains strong, and unemployment low.

He asserted the Fed is working with the US Treasury Department to scan the banking system and guarantee its strength and protect deposits.

And finally he said that it's unlikely for the Fed to cut interest rates this year, and a rate increase is possible.

Otherwise, earlier data showed US unemployment claims fell to 191 thousand in the week ending March 18, below estimates of 198 thousand, and down from 192 thousand in the previous reading. 

On trading, Dow Jones rose 1.3%, or 435 points as of 15:18 GMT to 32,465, while S&P 500 climbed 1.6%, or 64 points to 4,001, as NASDAQ added 2.3%, or 265 points to 11,934.