New York: US stocks added to gains and the dollar retreated Wednesday after the Federal Reserve raised benchmark interest rates.Higher interest rates typically boost the dollar. But the US central bank's statement did not suggest an acceleration of interest rate hikes as some experts had predicted, given improving US economic data and higher inflation.
"The dollar and Treasury bond yields initially fell while equities soared on the news," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
"Some investors may have expected a slightly more hawkish tone to the Fed's language given the tone of some of the recent commentary from the Fed." About 15 minutes after the Fed statement, the Dow Jones Industrial Average was at 20,927.44, up 0.4 percent.
The broad-based S&P 500 gained 0.7 percent to 2,381.40, while the tech-rich Nasdaq Composite Index advanced 0.6 percent to 5,890.94.
The euro rose to $1.0683, compared with $1.0638 about an hour before the Fed statement was released. In its quarterly economic projections, the central bankers still see the federal funds rate rising to 1.4 percent by the end of the year, which would imply another two increases, unchanged from the previous forecast. Some experts had thought the Fed might lift the number to three more rate hikes this year.
