US stock indexes hit record highs and Treasury yields fell on Wednesday after the Federal Reserve held interest rates unchanged and stuck to its projection of three rate cuts this year.
The S&P 500 (^GSPC) rose 0.8%, finishing at 5,224.62, its first-ever close above 5,200. Meanwhile, the Dow Jones Industrial Average (^DJI) popped about 1% to close at a record of 39,512. The tech-heavy Nasdaq Composite (^IXIC) led the gains, rising more than 1% to close at a record level of 16,369.
The Federal Open Market Committee (FOMC) held the federal funds rate target range at a 23-year high of 5.25-5.5%. The committee’s dot plot, which represents policymakers’ best guess of where interest rates and the economy are headed, showed most officials still expect to cut rates three times this year.
Fed officials see the fed funds rate falling to 4.6% by the end of 2024. That suggests the Fed will cut rates by 0.75% this year.
Bonds were little changed on the news. Yields on the 10-year Treasury (^TNX) were slightly lower at around 4.28% after rising over 20 basis points in the past two weeks.
