Fed meeting recap: Dovish stance fuels rally in stocks, Bitcoin

investing.com:

Stock and cryptocurrency prices rose higher after the Federal Reserve announced they were keeping interest rates unchanged while also reiterating expectations of three rate cuts before the end of 2024.

The S&P 500 closed 1.15% higher at 18,240 Wednesday, while Bitcoin rose sharply to reclaim $67,000 after falling as low as $60,000 earlier. Meanwhile, bond yields fell into the red, with the 2- and 10-year notes slipping to 4.57% and 4.22%, respectively.

The Fed maintaining interest rates on Wednesday marked the fifth consecutive policy meeting without change.

The decision underscores the central bank's strategy of waiting for additional data before considering rate reductions.

Despite aggressive rate hikes over the past two years aimed at combating high inflation, Fed Chair Jerome Powell emphasized that the Fed is not yet prepared to ease borrowing costs, amidst ongoing challenges of high interest rates and inflation for Americans.

Speculation from Wall Street suggests a potential first cut could occur in the summer.

In the latest economic projections, the Fed signaled a revision in its rate cut expectations, foreseeing fewer reductions in 2025 and 2026 compared to December's forecast. While still anticipating three rate cuts this year, officials expect slightly higher interest rates in the long term.

The Fed's revised forecasts indicate an expectation of higher «core» inflation, excluding food and energy prices, than previously anticipated.

Chair Powell highlighted the delicate balance the Fed faces between cutting rates too soon and delaying necessary adjustments, emphasizing a «wait-and-see» stance given the current economic stability and growth.

“It is consequential,” Powell said. “Fortunately, with the economy