Another rate hike hit to the world's biggest economy is buoying shares on Wall Street and here in Australia, as investors bet that the worst shocks are behind them.
The US Federal Reserve has just raised its version of the cash rate by 0.75 per cent this month.
This is the second month in a row it has hiked it by this much.
Central banks globally are hiking rates, including here in Australia, to tackle surging inflation.
Inflation, caused by a range of factors including energy shortages, war and supply-chain issues, is becoming a problem in many economies.
Just yesterday Australia posted its highest inflation rate in 21 years.
"Inflation has obviously surprised to the upside over the past year, and further surprises could be in store," chair Jerome Powell said.
"My colleagues and I are acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing, and transportation."
The US rate hike came ahead of the release of the nation's GDP figures tonight.
The last quarter result showed a decline of 1.4 per cent. Some economists are tipping this quarter will show a retraction too, which may indicate that the economy is in a recession.
Wall Street appeared to have factored in the US rate hike and was actually buoyed by it. Treasury yields, which factor in future rate hikes, were also falling.
This was after Mr Powell hinted the the rate hikes might be easing.
"As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation," he said.
The Dow Jones gained 1.4 per cent, the S&P500 was up 2.6 per cent, and the Nasdaq surged by 4.1 per cent.
City Index lead market analyst Tony Sycamore said the US markets appeared to have taken it that the US Federal Reserve was easing its stance.
"While it is short of a 'dovish pivot', the Fed has taken its first steps towards the dovish dance floor," he wrote this morning.
"Less forward guidance provides the Fed with the flexibility to take the foot off the monetary policy brake into yearend should economic data continue to slow."
The Australian dollar rallied slightly, to 69.98 US cents.
Tech stocks surge on US Fed announcement
Like Wall Street, the ASX 200 was trading up after the US rate hike news. It was up almost 1 per cent by mid-afternoon trade and closed up by that amount.
That is a new 20-day high for the benchmark.
The top stocks on the Australian share market on Thursday included Pointsbet Holdings (+20.1 per cent), Tyro Payments (+19 per cent) and Zip (+22.6 per cent).
Many were tech stocks coming off a low base, and their surge follows the Nasdaq's lead on Wall Street.
However, buy now, pay later stock Zip had already been surging all week. It is currently at $1.52, while Tyro is at 84 cents.
Of the 11 sectors, nine ended the day higher.
