Nifty50, Sensex gain 1% as US Fed pauses rate hikes
The domestic market opened higher on Thursday as the US Federal Reserve decided to hit a pause again on rate hikes. At the time of writing, Nifty50 was trading at 19,157, up 0.9% and Sensex at 64,155, after an increase of 0.9%. The US stock market too witnessed a notable upswing, as the Fed maintained interest rates steady at 5.25-5.5%. The Dow Jones surged by 0.7% while the S&P 500 and Nasdaq Composite rose by 1.1% and 1.6%, respectively.
Powell doesn't rule out a December hike
This bounce back comes after a disappointing October and three straight months of declines. The Fed also updated its post-meeting statement, highlighting that "economic activity expanded at a strong pace in the third quarter." Fed Chair Jerome Powell did not rule out the chance of another rate increase during the upcoming meeting in December. Nevertheless, Wall Street and Dalal Street seemed unfazed by the prospect of additional economically challenging hikes.
Fed likely to maintain current policy stance through 2024
In a message to investors, Whitney Watson, who serves as the global co-head and co-chief investment officer of fixed income at Goldman Sachs Asset Management, noted that the economy's enduring strength has not disrupted the rebalancing of the labor market or sparked renewed concerns about wage and price inflation. This suggests that disinflation will continue to advance, indicating that the Federal Reserve is likely to maintain its current policy stance through 2024, Watson notes.
