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Fed rate raise and looming China tariffs hit Wall Street

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US stocks lost some ground on Wednesday after the Federal Reserve raised interest rates and projected a slightly faster pace of rate hikes in the coming months.

The Federal Reserve’s move was widely expected but still marked a turning point in the US central bank’s shift from policies introduced to combat the 2007-2009 global financial crisis.

In raising its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75% and 2%, the Fed decided against keeping rates low to stimulate the economy and signalled it would accept above-target inflation at least through 2020. The Fed has raised rates seven times since late 2015. Two additional hikes are now expected by the end of this year, compared to one previously.

At market close, the Dow Jones Industrial Average fell 119.53 points, or 0.47%, to 25,201.20, the S&P 500 lost 6.84 points, or 0.25%, to 2,779.99 and the Nasdaq Composite dropped 8.09 points, or 0.11%, to 7,695.70.

Euro-area industrial production fell more than expected in April, dropping 0.9%, with poor economic data becoming the norm in the eurozone ahead of tomorrow’s European Central Bank decision. The meeting, after which the ECB might announce an end date for money printing, will also be accompanied by its latest projections for the region’s economy.

Overnight, the MSCI Asia Pacific Index fell 0.4% while Japan’s Topix index closed 0.4% higher as the yen weakened ahead of the US Fed decision. In Europe, the Stoxx 600 Index was 0.2% higher.

US to decide on China tariffs
Markets are watching closely for US President Donald Trump to decide on imposing tariffs on Chinese goods as soon as Friday........

© The National Business Review