The S&P500 rallied 0.81% overnight erasing yesterday’s declines as the FOMC Meeting Minutes continued its dovish rhetoric and said continued stimulus would not risk sparking a jump in the inflation rate. Inflation is expected to remain within its 2 percent goal. Policy makers continued to say that last month the economy is showing signs of improvement and the job market is slowly picking up.
Further reduction in the monthly bond purchase program is likely to continue and they re-iterated that interest rates will remain on hold for a ‘considerable time’ once it concludes the purchase program. U.S 10-year notes yields rallied 0.85% on the back of the positive FOMC announcement, the yield gap between 5 and 30 year Treasuries widening to the highest level in a month.
Gold futures declined 0.50% as traders saw less need for the save haven metal once the FOMC announced there was no threat of inflation.
WTI crude rose to a one-month high after a government report showed that stockpiles tumbled last week as imports dropped to a 17 year low.