Spark News India Igniting Minds Daily
Early cues from GIFT Nifty and US indices suggest a positive start for frontline Indian indices today. At 8:45 am, GIFT Nifty is trading higher by 0.54 per cent at 22,741.00, indicating a gap-up opening.
In a significant development, the US Federal Reserve decided to keep interest rates unchanged within the 5.25 per cent-5.50 per cent range during its May meeting. However, providing a major relief to investors, Fed Chair Jerome Powell announced that there would be no further hikes in interest rates. Powell reiterated the central bank’s commitment to making monetary policy decisions independently, regardless of political factors.
Moreover, Powell stressed the importance of ensuring greater confidence that inflation is moving towards the target range of 2 per cent, although he did not provide specific details on future actions.
The decision to maintain interest rates comes as the US Fed has kept rates steady since mid-2023. Additionally, Powell announced a slowdown in the pace of shrinking the central bank’s balance sheet. He clarified that this adjustment is not aimed at providing additional accommodation to the economy but is in response to persistent inflation and lower GDP figures. Despite concerns from some analysts about stagflation, Powell denied suggestions that the US economy is entering such a period.
Overall, the announcements from the US Federal Reserve provide a sense of stability and reassurance to investors amid ongoing economic uncertainties.
