Fed Chief's Comments Lead to a Market Milestone

S&P 500 closes above 4,500 for the first time
By Newser Editors,  Newser Staff
Posted Aug 27, 2021 3:07 PM CDT
Fed Chief's Comments Lead to a Market Milestone
Trader Michael Conlon works on the floor of the New York Stock Exchange in this file photo.   (AP Photo/Richard Drew)

The benchmark S&P 500 closed above 4,500 or the first time on Friday, and comments made by the Fed chief are credited for part of the reason. In his highly anticipated speech, Jerome Powell said the Federal Reserve would not overreact to rising inflation or raise interest rates anytime soon, reports the Wall Street Journal. Powell also reiterated that the central bank would likely begin pulling back on some of its monetary stimulus later this year, but that move was anticipated, per CNBC. The S&P rose 39 points to 4,509, the Dow rose 242 points to 35,455, and the Nasdaq rose 183 points to a record 15,129.

“Interest rate hikes are far, far away, and investors are happy about that,” Michael Arone of State Street Global Advisors tells CNBC. “I think Powell deserves some credit for navigating the tapering of assets, avoiding a tantrum. The market seems well prepared for the start of tapering.” Some investors had feared that Powell would announce a much quicker start of that process, but he "reset expectations slightly towards later,” Christopher Smart of Barings tells the Journal. Powell also said the Fed is keeping an eye on the jobless rate. “We have much ground to cover to reach maximum employment," he said, per the AP. (Read more stock market stories.)

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