US stocks rose sharply on Wednesday afternoon after the Federal Reserve took a more aggressive stance against rising inflation, despite the shift meaning a quicker wind down of crisis policy measures that have supported financial markets throughout the coronavirus pandemic.
Wall Street’s benchmark S&P 500 index, which had slipped about 0.2 per cent earlier in the day, swung to a 1.6 per cent gain after the US central bank announced the results of its latest policy meeting, closing at its second highest level on record. The technology-heavy Nasdaq Composite also erased its 0.7 per cent decline to trade up 2.2 per cent for the day.
In a hawkish update, Fed officials said they now expected to raise US interest rates three times in 2022, having previously been evenly split on the prospects of a lift-off in rates next year.