Stocks Rally on Powell’s Bullish Economic Remarks: Markets Wrap
- Fed lifts rates quarter point in opening bid to curb inflation
- Powell says U.S. economy can withstand Fed tightening
Stocks closed near session highs after Federal Reserve Chair Jerome Powell struck a more positive tone on the prospects for economic growth as the central bank raised interest rates for the first time since 2018. Bonds retreated.
The S&P 500 posted its biggest two-day rally since April 2020 as Powell said the “economy is very strong” to handle tighter policy and the probability of a recession is “not particularly elevated.” Treasury yields rose, led by rates at the front end of the curve. Swaps linked to policy announcement dates at one stage indicated at least 75 basis points of hikes would take place over the coming two meetings, suggesting one of the anticipated moves from the central bank might be bigger than the standard size of 25 basis points.