Encouraged by the recent data on wage growth, slowing inflation, and stable economic growth, the Federal Reserve approved a quarter-percentage-point interest rate hike yesterday. Stocks have had a solid start to the year, with the S&P 500 posting its biggest monthly gain since October and the Nasdaq surging in its best January since 2001.
However, Fed Chair Jerome Powell said that the Fed would continue to hike rates for the foreseeable future and reiterated that the central bank would not consider rate cuts until the committee is "confident" that inflation is moving toward its 2% target. Further, FOMC's December minutes confirmed that not one participant thought cutting interest rates this year would be appropriate.
