Wall Street Rises as Fed Maintains Interest Rates

2025-05-08 05:15:07

(MENAFN) U.S. stock markets ended higher midweek following the Federal Reserve’s decision to leave its key interest rate unchanged.

The Nasdaq inched up by 0.27 percent, translating to a 48.5-point increase, closing at 17,738.16.

Meanwhile, the S&P 500 posted a 0.43 percent gain, settling at 5,631.28.

The Dow Jones Industrial Average also recorded a solid uptick, climbing 0.7 percent to conclude the session at 41,113.97.

As widely expected, the Federal Open Market Committee opted to retain its benchmark overnight lending rate within the existing range of 4.25 percent to 4.5 percent, a level maintained since December.

In its official statement released after the meeting, the Committee acknowledged that "The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen."

This highlights the Fed’s balancing act between fostering job growth and keeping inflation in check.

The Fed's stance arrives at a time of mounting anxiety over a potential global trade conflict, which could push up costs and hinder the central bank’s effort to bring inflation down to its 2 percent objective.

These inflationary pressures, if they persist, could complicate future monetary policy decisions.

During a press conference on Wednesday, Fed Chair Jerome Powell cautioned that if the newly imposed significant tariff hikes remain in place, they are likely to contribute to increased inflation, hamper economic expansion, and potentially elevate joblessness.

Powell also noted that the likelihood of interest rate reductions later this year will "depend" on how these tariffs impact employment levels and price stability.

When asked whether political pressure from U.S. Leader Donald Trump, particularly his call for lower interest rates, influences the Fed’s decisions, Powell dismissed any such impact, asserting that it does not interfere with the work of the central bank "at all."

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