The Federal Reserve wrapped up a two-day meeting today by finally giving a timetable for when policy makers will start shrinking its $4.5 trillion stockpile of assets and reiterating that it anticipates one more interest-rate increase this year.
Chair Janet Yellen set October as the start of the unwinding of the central bank’s balance sheet and stuck to the predicted one rate hike left for 2017. While both were largely expected, markets are moving on the finer details. Here’s a look at the reactions.
The Bloomberg Dollar Spot Index rose the most since January after the Fed eased speculation that it would taper its outlook for higher rates because of damage done to the economy by hurricanes.
The precious metal initially fell when the statement was released due to the more hawkish tone. The precious metal is now down just over 0.5 percent on the day.
The broader S&P 500 Index extended losses after the Fed statement was released before recouping losses to close higher.
Big banks are seeing shares rise as investors are happy to hear the Fed would like to raise rates and trim its balance sheet at the same time, which may help profits.
The yield curve flattened on the back of the Fed meeting as market participants digested the more hawkish tone.
— With assistance by Dani Burger