The Standard & Poor’s 500 index picked up 23.36 points, or 1.1 percent, to 2,163.12. The Nasdaq composite climbed 6 points, or 0.1 percent, to 5,247. On Wednesday, the CAC 40 climbed 0.8 percent, the DAX gained 0.7 percent and the FTSE rose 0.2 percent.
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The STOXX Europe 600 Basic Resources index rose more than 3 percent to its highest level since the middle of August.
“The last thing the Fed wants is to disrupt financial markets with a big surprise”, said Torsten Slok, chief worldwide economist at Deutsche Bank. The won jumped 1.7 per cent and the yen rose as much as 0.2 per cent to 100.12 per dollar, after strengthening 1.4 per cent on Wednesday.
But three members of the Fed’s 10-member policymaking committee voted to raise the benchmark rate, and most Fed officials said separately that they still expect to raise the rate once before the end of the year.
“We’re generally pleased with how the USA economy is doing”, she said, although the Fed did cut its forecast for growth this year from 2% to 1.8%.
The central bank characterized the near-term risks to its economic outlook as “roughly balanced”.
The policymakers are also likely to downgrade their estimates for how many rate rises the economy will need in the coming years given that output, productivity and inflation are growing slower than in past decades.
“The committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives”, the Fed said in a statement that reflected the views of the majority.
BANK OF JAPAN: The Japanese central bank said it will hold its short-term policy rate at negative 0.1 percent and might cut it further. It promised to keep expanding the nation’s money supply until inflation surges above 2 percent for an unspecified time.
According to analysts, the hawkish tone of the statement reveals a divided Fed that is feeling more pressured to continue normalizing interest rates. The Malaysian ringgit rise 0.7 percent to 4.1065 versus the greenback.
U.S. crude (WTI) futures advanced 0.9 per cent to $45.75 after soaring 2.9 per cent on Wednesday. The contract added 69 cents on Wednesday to close at $45.34.
Stock markets rose after the BOJ decision, buoyed by bank shares and a 2.9% jump in United States oil prices to $45.34 a barrel. That may well be true when looking at the Fed real GDP trackers which is suggesting an uptick I the current third quarter compared to the anemic pace seen in previous quarters but recent data such retail sales, industrial production as well as key business surveys have clearly bee surprisingly weak.
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“The next several days will become a test of BoJ’s new policy and if it fails to reach its mark, the dollar-yen rate could drift towards 100.00 as disappointment creeps in”.
