U.S. stocks and gold futures rallied right after the Federal Open Market Committee (FOMC) maintained interest rates and said it sees two interest-rate hikes this year instead of four.
At 2:00 p.m. in New York, the Dow Jones Industrial Average jumped 0.5% to an intraday high of 17,336.99. The gauge later trimmed its gains to 0.3%.
By 2:26 p.m., the S&P 500 had increased 0.3% to 2,021, while the tech heavy NASDAQ Composite had gained 0.4% to 4,746.56.
Gold for April delivery rallied 1% to 1,237.20 a troy ounce in electronic trading, up from their $1,229.80 a troy ounce settlement. Higher rates can boost the U.S. dollar, pressuring dollar-denominated prices for bullion and dulling demand for the zero-yielding precious metal.
The U.S. dollar index fell 0.6% to 96.09. The dollar slipped 0.2% to 113.07 yen, compared to 113.65 yen shortly before. The U.S. currency also skidded 1.5% against the Russian ruble, falling to 70.0 rubles from 70.6 rubles shortly before.
The Fed said in a statement that its rate-setting FOMC decided to leave the central bank’s benchmark interest rate in a range of 0.25% to 0.5% at its March meeting. This decision was widely expected.
In its latest so-called “dot plot,” Fed officials penciled in only two quarter-point increases this year, down from four increases in December.
The Fed statement noted the mixed economic data but highlighted the recent strong increases in core inflation measures excluding food and energy prices.
“Inflation picked up in recent months,” the Fed said.