The Wall Street eked-out marginal gain as the Federal Reserve released minutes from its most recent meeting showed that the central bank remains committed to supporting markets and the economy. However, market gains capped as many market participants remained reluctant to make significant moves amid question the ability to hold off on a rate hike for as long as the Fed has stated.
At the close of trade, the Dow Jones Industrial Average index added 16.02 points or 0.05% to 33,446.The S&P 500 was up 6.01 points or 0.15% to 4,080. The tech-heavy Nasdaq Composite Index fell 9.54 points or to 0.07% 13,689.
Most of sectoral indices closed mixed, with Consumer discretionary sector rose 0.72%, information technology sector added 0.54%, energy sector added 0.44%, financials sector added 0.41%, and real estate sector rose 0.15%, while materials sector fell 1.75%, industrials sector fell 0.44%, healthcare sector fell 0.24%, consumer staple sector fell 0.07%, and utilities fell 0.12%.
ECONOMIC NEWS: The Commerce Department released a report showing the trade deficit widened to $71.1 billion in February from a revised $67.8 billion in January.
Fed Sees Improvement In Growth But Unlikely To Change Ultra-Loose Monetary Policy Anytime Soon
The minutes from the Federal Reserve's latest monetary policy meeting indicated the central bank is unlikely to change its ultra-loose monetary policy anytime soon. Although participants in the March meeting acknowledged the improvement in the medium-term outlook for real GDP growth and employment, they continued to see the uncertainty surrounding that outlook as elevated. The minutes showed most participants still viewed the coronavirus pandemic as posing considerable risks to the economic outlook.
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New more-contagious virus strains, obstacles in getting sufficient numbers of the public vaccinated, or social-distancing fatigue were among the risks cited by the participants. "However, given the resilience of the economy in the face of the earlier surge in new COVID-19 cases, hospitalizations, and deaths and the magnitude of fiscal support enacted, the downside risks to the economic outlook were seen as smaller than for the previous projection," the Fed said.
With measures of the economy still below pre-pandemic levels, the Fed reiterated that it would likely be "some time" before the central bank considers changing its monetary policy stance. The minutes said members expect to maintain an accommodative stance of monetary policy until the Fed's goals of maximum employment and inflation moderately above 2 percent for some time are achieved.
The minutes also highlighted the recent increase in longer-term Treasury yields, which was attributed to increased investor optimism about the economic outlook and expectations of higher Treasury debt issuance.
Meanwhile, Fed members now expect U.S. GDP to soar by 6.5 percent in 2021 compared to the 4.2 percent spike forecast last December. The forecast for the pace of growth in core consumer prices, which exclude food and energy prices, was also upwardly revised to 2.2 percent from 1.8 percent. In its accompanying statement, the central bank acknowledged that indicators of economic activity and employment have turned up recently. Nonetheless, the median forecast from Fed members predicts interest rates will remain at current levels through 2023.
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