NEW YORK – Wall Street ended the week with new records after Federal Reserve chief Jerome Powell signalled that the central bank could slow its stimulus by the end of the year, but is in no rush to raise rates.
The broad-based S&P 500 advanced 0.9% to close at 4,509.37 – its first close over the 4,500 mark – and the tech-rich Nasdaq Composite Index jumped 1.2% to 15,129.50. Both had retreated on Thursday after multiple records.
The benchmark Dow Jones Industrial Average gained 0.7% to end at 35,455.80.
The Fed’s stimulus helped push equities steadily higher in recent months, and in his highly anticipated speech to the annual Jackson Hole central banking symposium, Powell highlighted its focus on waiting for the labour market to improve further.
While rising infections involving the Delta variant of Covid-19 remain a risk, he said the economy should continue to improve, and policymakers can start the process of tapering massive bond purchases by year-end.
But, the comments at Jackson Hole did not provide any specifics on the timetable.
Kim Forrest at Bokeh Capital Partners said the focus on “fixing employment ahead of inflation” means “tapering is moved to a further-off place than investors had anticipated”.
Government data released yesterday showed that a key inflation gauge rose 4.2% annually in July, but Powell warned it is harmful to make an “ill-timed” policy move to respond to temporary price pressures that already appear to be receding. – AFP, August 28, 2021
