FOX Business correspondent Edward Lawrence with the latest fed decision on ‘Making Money.’
The Dow Jones Industrial Average closed above 37,000 for the first time in history after Federal Reserve Chairman Jerome Powell signaled, for starters, that policymakers are likely done raising interest rates and cuts could soon be in the cards.
“We believe that we are likely at or near the peak rate for this cycle. Participants didn’t write down additional hikes that we believe are likely. So that’s what we wrote down. But participants also didn’t want to take the possibility of encourage hikes off the table. So that’s really what we were thinking,” Powell said during a press conference following the decision.
Federal Reserve Chairman Jerome Powell speaks during a news conference at the headquarters of the Federal Reserve on Dec. 13, 2023, in Washington, D.C. The Federal Reserve announced today that interest rates will remain unchanged. ((Photo by Win McNamee/Getty Images))
Policymakers, in their annual projections, priced in the potential of three rate cuts, with the federal funds rate falling to a range of 4.4% to 4.9%, down from the current 5.25% to 5.50%.
The Dow Jones Industrial Average added 512.30 points, or 1.4%, on Wednesday. The Nasdaq and S&P 500 gained 1.38% and 1.3%, respectively.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 37090.24 | +512.30 | +1.40% |
| SP500 | S&P 500 | 4707.09 | +63.39 | +1.37% |
| I:COMP | NASDAQ COMPOSITE INDEX | 14733.96386 | +200.57 | +1.38% |
This is the first record close for the Dow since January 2022, with the benchmark up over 11% for 2023 as of Wednesday.
“This is great news for the equity market and the U.S. economy,” said Wharton University professor Jeremy Siegel during an appearance on “The Claman Countdown” following Powell’s presser. He predicts the first potential rate cut will come in March, in line with the CME’s FedWatch Tool.
Dow Jones Industrial Average
UnitedHealth Group has added the most points to the benchmark since the 36,000 level, while 3M has subtracted the most, according to Dow Jones Market Data Group. Apple also closed at an all-time high and has added $1 trillion in market cap this year alone driving it to $3 trillion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UNH | UNITEDHEALTH GROUP INC. | 548.98 | +3.32 | +0.61% |
| MMM.AAPL | n.a. | n.a. | n.a. | n.a. |
As for the economy, inflation, while easing, remains a wildcard for policymakers.
“Inflation has eased from its highs and this has come without a significant boost in unemployment. That’s very good news, but inflation is still too high. Ongoing progress in bringing it down is not assured, and the path forward is uncertain,” Powell added.
Earlier this week, the consumer price index for November eased but certain price pockets remain high.
