New York (AFP)
The New York Stock Exchange ended without direction on Wednesday as the U.S. central bank remained cautious about the state of the U.S. economy and planned to leave interest rates near zero until 2022.
The highly technological Nasdaq closed for the first time above the symbolic threshold of 10,000 points, taking 0.67% to 10,020.35 points.
The Dow Jones, a leading Wall Street index, lost 1.04% to 26,989.99 points and the S&P 500, which represents the 500 largest companies listed in New York, fell 0.53% to 3,190.14 points .
Investors were closely monitoring the conclusions of a Fed meeting on Wednesday and "the bottom line is that interest rates will stay close to zero for some time," says Patrick O'Hare debriefing.
This prospect is likely to excite brokers, the low rates making it easy for businesses and investors to borrow money.
The Fed and its president Jerome Powell were also cautious in their assessment of the economy, pointing out that millions of Americans were still unemployed.
"He seems very aware that the recovery may not be as quick as the equity market thinks," said O'Hare.
The Fed expects in this regard a fall in the US gross domestic product of 6.5% this year before a rebound of 5% next year and growth of 3.5% in 2022. The institution also projects a rate unemployment rate of 9.3% in 2020 and 6.5% in 2021.
"Even though the Fed has made it very clear that it will keep rates low for a long time, which is good for liquidity and share prices, we have a long way to go before the economy returns to levels "before the pandemic," said economist Joel Naroff.
Asked about the possibility of a bubble in the markets, Mr. Powell also assured that the Fed was not interested in the level of asset prices but just in the proper functioning of financial circuits.
On the bond market, the 10-year rate on the US debt fell sharply, to 0.7345% against 0.8253% Tuesday at the close.
© 2020 AFP