The Dow Jones Industrial Average hit an all-time high Wednesday, surpassing 37,000 for the first time, after the Federal Reserve opted to hold interest rates steady once again and signaled the possibility of rate cuts next year.
The Dow closed at 37,090, up 1.4 percent, as the central bank indicated that its nearly two-year campaign of rate hikes may be coming to an end.
The Fed kept its baseline interest rate at a range of 5.25 to 5.5 percent for a third consecutive meeting Wednesday, as inflation has continued to show steady improvement since hitting a 40-year high last summer.
“Inflation has eased from its highs, and this has come without a significant increase in unemployment,” Fed Chair Jerome Powell said at a press conference following the central bank’s announcement. “That’s very good news. But inflation is still too high.”
Powell and Fed officials are hoping to bring inflation back down to 2 percent. The latest data released by the Labor Department on Tuesday showed consumer prices up 3.1 percent annually in November.
The U.S. economy has remained surprisingly resilient in the face of the Fed’s aggressive rate hike campaign, with the unemployment rate remaining below 4 percent and widespread predictions of a recession failing to materialize so far.
While the central bank has said little about its plans for 2024, all but three members of its Federal Open Market Committee — the panel responsible for monetary policy decisions — expect at least two rate cuts next year.