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The markets slumped on Wednesday after the Federal Reserve said it will hold its monetary policy steady, and sees downside economic risks diminishing.
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As of 2:11 p.m. ET, the Dow Jones Industrial Average fell 64.3 points, or 0.43%, to 15252, the S&P 500 dipped 7.1 points, or 0.43%, to 1645 and the Nasdaq Composite fell 13.4 points, or 0.38%, to 3469.
The big day has finally arrived for Wall Street: The Federal Reserve unveiled its latest monetary-policy decision and forecasts.
The central bank said it will continue buying assets at a clip of $85 billion a month, and hold short-term interest rates at essentially 0% until the unemployment rate falls to 6.5%. The Fed also said is prepared to increase or reduce its purchases based on economic conditions. However, downside risks have ‘diminished’ since the fall.
The central bank also said it sees the unemployment rate falling faster than it forecast in March. It now sees the jobless rate clocking in at 6.5% to 6.8% next year, from 6.7% to 7%. At the same time, it also upped its forecast for economic growth in 2014 to 3% to 3.5%, from 2.9% to 3.4%.
The markets fell mildly on the news in fairly choppy action.
"Bottom line, the Fed acknowledged a slightly better economic outlook and the market can only take that as a verbal 1st step to some change in policy at their next meeting in July," Peter Boockvar, lead portfolio manager at Excelsior Wealth Management at Morgan Stanley, wrote to clients.
In corporate news, FedEx (NYSE:FDX) posted adjusted fiscal fourth-quarter profits of $2.13 a share, topping the Street’s view of $1.96. Sales of $11.4 billion matched expectations. The shipping giant is seen as a bellwether since it connects so many different parts of the business supply chain.
Commodities prices were also little changed ahead of the Fed decision. The benchmark U.S. crude oil contract rose 15 cents, or 0.15%, to $98.59 a barrel. Wholesale New York Harbor gasoline rose 0.39% to $2.891 a gallon. In metals, gold climbed $5.0, or 0.42%, to $1,373 a troy once.