U.S. equity markets fell further after the Federal Reserve’s latest policy decision. The Dow dropped 1.6 % to 46,225 points, the broader S&P 500 fell 1.4 % to 6,625, and the technology‑heavy Nasdaq declined 1.4 % to 24,425.
The Fed kept its policy rate unchanged, but officials sent clear signals that rate cuts are not expected in the near future. In contrast, the committee cautioned that the impact of the Middle East conflict on the U.S. economy remains uncertain, and it is “watching risks closely”.
Updated projections show the Fed now sees inflation at 2.7 % for the rest of the year, compared with 2.4 % in December. Chair Jerome Powell explained that the higher inflation outlook reflects a mix of factors, including persistent oil price pressure and tariff effects that continue to pose inflation risks.
“Fed sounded very hawkish today” commented Thomas Gitzel of VP Bank. “It is now clear that Powell will finish his term as chair in May without a further rate cut”.
Oil prices continued to climb. On Wednesday evening around 9 p.m. German time, a barrel of North Sea Brent crude fetched $109.80-an increase of 6.2 % over the previous day’s close.
The euro slipped against the dollar: 1 € = 1.1461 USD, meaning 1 USD = 0.8725 €.
Gold fell sharply in the evening session, trading at $4,821 per fine troy ounce, a drop of 3.6 %. This translates to 135.24 EUR per gram.
