Major US equity indices witnessed flat to a positive opening on Wednesday as investors awaited the latest FOMC policy decision, due to be announced later in the session.
The Fed is widely expected to raise its benchmark rate, for the second time this year, by 25 basis points to 1.75%-2% range. This would mark the seventh rise since the start of monetary policy normalization in December 2015.
Market participants would look for clarity over the central bank’s forecasts for interest rates from the accompanying monetary policy statement and updated economic projections, especially the “dot-plot”, which would significantly impact investors’ sentiment towards perceived riskier assets – like equities.
On the economic data front, wholesale inflation jumped 0.5% in May, primarily on the back of rising oil prices. Against the backdrop of Tuesday’s hotter-than-expected US consumer prices, today’s reading added upward pressure on inflation and could lift the median forecast in the “dot-plot” to four hikes this year.
At the time of writing this report, the Dow Jones Industrial Average and the broader S&P 500 Index were fractionally higher at 25,327 and 2,788 respectively, while tech-heavy Nasdaq Composite Index gained further beyond the 7,700 mark and added nearly 18-points.
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