Minutes from the Federal Reserve’s May 4 meeting shows central bank officials in agreement on the ned for 50-basis-point interest rate increases at the June and July meetings. And then, the minutes say, the Fed would respond to developments in the economy either with more interest rate increases or a pause to let the economy recover.
That’s essentially in line with market sentiment–although Wall Street may be more convinced of the need for a September interest rate increase.
That agreement was reassuring to the stock market today. No surprises from the Fed is almost always a good thing.
The Standard & Poor’s 500 closed higher by 0.95% and the Dow Jones Industrial Average gained 0.60%. The NASDAQ Composite picked up 1.51% and the small cap Russell 2000 gained 1.83%.
The Fed’s September 22 meeting is the wild card here. The odds of a 50 basis point increase dropped to 34.6% today from 54.8% on May 18, according to the CME FedWatch Tool.
