U.S. Stock Futures Benefited from Fed’s Meeting

Federal Reserve’s meeting helped to boost U.S. stock futures. On Thursday morning, stock futures rose after the Federal Reserve signaled it would be aggressive on tapering and sees three interest hikes in 2022. 

The country’s central bank provided multiple indications on Wednesday that its ultra-easy policy is coming to an end. According to the central bank, it will accelerate the reduction of its monthly bond purchases. The Federal Reserve will be buying $60 billion of bonds each month starting in January. It was tapering by $15 billion a month in November, doubled that in December, then will accelerate the reduction further come 2022. 

After that wraps up, the country’s central bank expects to start raising interest rates, which were held steady at this week’s meeting. Projections released by the central bank indicate that Fed officials see as many as three rates hikes coming in 2022. 

The Federal Open Market Committee revised its inflation outlook for 2021, from 4.2% for all items to 5.3%. The committee also changed its inflation outlook to 4.4% from 3.7% excluding food and energy.  

In the meantime, the unemployment rate projection for 2021 came down to 4.3% from 4.8% in September. 

The Federal Open Market Committee decided to reduce its forecast for economic growth this year. The committee expects the GDP to grow by 5.5% this year, compared with the 5.9% indicated in September. 

Stock futures on Thursday

As previously mentioned, U.S. stock futures strengthened their positions on Thursday morning.

For example, futures on the Dow Jones Industrial Average gained about 100 points. The S&P 500 500 advanced 0.37%. The Nasdaq 100 futures rose 0.54%.

U.S. stocks rose on Wednesday. U.S. stocks traded in negative territory throughout the regular session and turned higher ahead of Jerome Powell’s press conference. 

The Dow Jones Industrial Average gained 383 points or 1.08%. The S&P 500 advanced 1.63% and the Nasdaq Composite added 2.15%.