US stocks soar as Fed tips rate rise
STOCKS closed at record highs in the United States last night after the Federal Reserve indicated that a planned rate rise in December was still on the cards.
The index closed at a record 22,872.89, having gained 42.21 points on the day, boosted by the release of minutes from the Fed’s monthly meeting in September. These showed that despite some policymakers expressing concern that there was not yet enough evidence of price gains to support a third rise this year, it was likely to go ahead.
There had been a debate over whether forces holding inflation down this year were persistent or temporary, the minutes showed.
The minutes of the meeting also revealed that the central bank “expected growth of real GDP in the third quarter to be held down by the severe disruptions caused by the storms”.
But it added that the economy would rebound later in the year, thanks to rebuilding activity in the affected areas, and that higher prices for gasoline and other items were likely to temporarily boost inflation, counteracting any negative effects.