A street sign along Bay Street in Toronto's financial district is shown on Tuesday, January 12, 2021. THE CANADIAN PRESS/Nathan Denette
NSDTORONTO - Strength in industrials and metals helped buoy Canada's main stock index amid energy weakness Wednesday, while U.S. stock markets were mixed after the country's central bank held interest rates steady.
The Federal Reserve held interest rates for the first time in 15 months, after raising it 10 times in a row, but made it clear more hikes were in the pipeline.
Fed Chair Jerome Powell said at a news conference that the bank is 鈥渟trongly committed鈥 to bringing inflation down to its two per cent goal.
"The process of getting inflation down is going to be a gradual one 鈥 it鈥檚 going to take some time,鈥 he said.
The S&P/TSX composite index was up 24.69 points at 20,015.09.
In New York, the Dow Jones industrial average was down 232.79 points at 33,979.33.The S&P 500 index was up 3.58 points at 4,372.59,while the Nasdaq composite was up 53.16 points at 13,626.48.
The rate pause wasn鈥檛 a surprise for investors, but the central bank鈥檚 messaging was, said Michael Currie, senior investment adviser at TD Wealth. Instead of saying the bank may or may not raise rates in the future, the message was clear: rates will go up again in the near future, with the Fed signalling two more potential hikes this year.
鈥淚t was just an absolute fact,鈥 said Currie.
The bank鈥檚 economic projections were more hawkish than many expected, with predictions that the benchmark rate will stay higher for longer.
鈥淲e want to see inflation coming down decisively,鈥 said Powell.
With this latest development, any dwindling expectations of rate cuts in 2023 should be quelled, said Currie, as the bank has made it clear that the path to its target for inflation is a long one.
"The speed is changing a bit but the direction is still the same,鈥 said Currie.
The central bank鈥檚 announcement came the day after promising data on inflation, and Wednesday saw producer prices lower than expected, said Currie.
But the central bank鈥檚 updated forecasts predicted higher economic growth in 2023 than previously indicated, as well as persistent core inflation.
Another rate hike is also possible in Canada after last week鈥檚 hike, said Currie.
鈥淎 week and a half ago, we weren't even expecting a rate hike in Canada,鈥 he said.
鈥淭hings have changed pretty quickly.鈥
The 好色tv dollar traded for 75.20 cents US compared with 75.13 on Tuesday.
The July crude contract was down US$1.15 at US$68.27 per barreland the July natural gas contract was up less than a penny at US$2.34 per mmBTU.
The August gold contract was up US$10.30 at US$1,968.90 an ounceand the July copper contract was up four cents at US$3.87 a pound.
鈥 With files from The Associated Press
This report by 好色tvwas first published June 14, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
The 好色tv Press. All rights reserved.
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