The initial market reaction to the Federal Reserve was swift, but it was far from violent. U.S. stocks and gold climbed higher. Ten-year Treasury yields and the dollar fell.
The market moves came after Fed officials on Wednesday reduced estimates of how much they expect to raise short-term interest rates in 2016 and beyond.
As traders expected, the central bank held its benchmark rate steady for now. Without committing to a timetable, officials said the next move would depend on “realized and expected economic conditions” and reiterated that they plan to move gradually. And they offered up a slightly more pessimistic view on economic growth.
The stock-market reaction wasn’t especially massive. The S&P 500 sat slightly in the red just before the statement was released, shot into positive territory after it crossed the wire, and then momentarily dipped back into negative territory about 15 minutes later. But it was less than a 1% move from trough to peak.
Then, as Fed Chair Janet Yellen prepared to give a press conference, traders began to send stocks higher again. Here’s a look at the snap reaction across some of the major asset classes as Ms. Yellen speaks. The charts are live and will present an updated picture if reloaded.
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