Fed's messages are dovish according to global markets
The Fed, which kept interest rates steady, pointed to the tightening of financial conditions and indicated that the rise in bond yields has reduced the need for interest rate hikes, but left the door open for further increases if necessary. Stocks and bonds rose after Fed Chair Powell stated that they have "come a long way" in tightening and are "proceeding very carefully."
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As the Fed's decision was not evaluated as a "hawkish hold" as investors had expected, but rather interpreted as a "dovish hold," and following Fed Chair Jerome Powell's statement that the Fed has "come a long way," the S&P 500 index and Treasury bonds continued their rise, while the dollar retreated.
Before the decision, market participants were pricing in a one-third probability of a 25 basis point interest rate hike by the end of January. After the decision, pricing for this expectation decreased. The S&P 500 closed up 1.05 percent, and the Nasdaq 100 closed up 1.77 percent.
US and European index futures indicated that the rise could continue.
The MSCI Asia Pacific Index extended its gains for a second day. The US 10-year Treasury yield, which fell by 20 basis points on Wednesday, is at 4.7154 percent this morning. The Bloomberg Dollar Index recorded a 0.5 percent decline over two consecutive days.