US stock futures rallied for a second consecutive day today (December 18th) after the Federal Reserve reaffirmed that it remains in no rush to raise interest rates.
At 08:30 ET, the Dow Jones Industrial Average futures advanced 1.1 per cent to 17478, while the S&P 500 futures gained 1.1 per cent to 2031 and the Nasdaq-100 futures rose 1.3 per cent to 4213.
Fed chair Janet Yellen said yesterday the central bank is unlikely to raise rates before the end of April 2015, even though a series of report has shown that the US economy is on a path to a steady recovery.
The central bank is thus signalling it is edging closer to raising interest rates from record lows.
The news triggered gains in stocks around the globe. The Standard & Poor’s 500 Index jumped two per cent yesterday, the biggest gain in more than a year. Japan's Nikkei 225 soared 2.5 per cent to 17,242.33 and Hong Kong's Hang Seng added 1.1 per cent to 22,828.49.
"The Federal Open Market Committee (FOMC) statement issued today had something for everyone but, on balance, it does not dissuade us that unexpectedly strong employment growth over the next few months will prompt the Fed to hike rates next March, sooner than most others expect," chief US economist at Capital Economics, Paul Ashworth, told CNBC.
Tumbling oil prices, along with the economic woes of the eurozone, Japan, China and Russia did not change the Fed's plan of action, given that a series of recent data show the US economy seems to be on the path to recovery.
The Federal Reserve said on September 17th that there was no "calendar date" for an interest rate rise, adding it will do so once a "considerable time" has passed after its stimulus programme ends in October.
Analysts had been expecting the Fed to drop the phrase "considerable time", but it surprised some with its "patient" stance.
The Fed stayed true to Janet Yellen's statement in September that that the strength of US economic data and the level of inflation, not a calendar deadline, will dictate when the Fed ultimately raises rates.
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