U.S. stock gains accelerated Tuesday (April 18) after minutes from the latest Federal Reserve meeting on monetary policy showed most members agreed the central bank’s chapter of steady rate hikes was coming to a close.
CBS MarketWatch reported that the minutes followed soothing comments on inflation and energy prices from from Janet Yellen, president of the San Francisco Federal Reserve Bank, along with a tame wholesale inflation report.
Most members of the Federal Reserve Open Market Committee (FOMC) agreed that the Fed’s recent chapter of steady rate hikes was coming to a close, according to a summary of the March 27-28 meeting released Tuesday. “Most members thought that the end of the tightening process was likely to be near and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy,” the summary said.
The Fed has hiked rates for 15 straight meetings, bringing rates back to 4.75% after hitting a low of 1.0% in the spring of 2004.
“The market definitely had an upward trajectory coming into this release due to the benign inflationary data and dovish commentary from a Fed president,” said Art Hogan, chief market strategist at Jefferies & Co.
Hogan said the Fed minutes showing the bank was “close” to ending its hikes was certainly helping although “close” could mean the central bank ending its hikes at 5.5%. The fed funds rate currently stands at 4.75%.
Before the Fed minutes, stocks got a boost after Yellen said inflation should remain well contained in the future even if inflation risks are currently tilted “slightly” to the upside. She also expects energy prices to stabilize. In addition, she noted significant moderation in house prices recently.