US stocks hit record high as Federal Reserve gives strongest hint yet that interest rates will be reduced
US stocks surged to record highs after the chairman of the Federal Reserve gave his strongest hint yet that interest rates will be reduced.
The Dow Jones Industrial Average, S&P 500 and Nasdaq 100 all made intra-day highs after Fed chief Jerome Powell primed markets for a cut as early as this month.
Rocky economic figures suggest that rates may need to come down, and traders expect this to boost companies’ profits by making it easier to borrow. The current Fed rate is set at 2.25 per cent to 2.5 per cent.
The Dow Jones Industrial Average, S&P 500 and Nasdaq 100 all made intra-day highs after Fed chief Jerome Powell primed markets for a cut as early as this month
Giving evidence to Congress, Powell said that many Fed members saw the case for action during its June meeting.
He said: ‘Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook.’
Powell has been heavily criticised by President Donald Trump, but last night insisted he will not be forced out of the job.
He said: ‘The law gives me a four-year term and I fully intend to serve it.’
Powell also attacked Facebook’s plans to launch an online currency called Libra.
He said: ‘Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability.’