After almost two years of aggressive rate hikes, news that officials at the US Federal Reserve are expected to cut interest rates three times in the coming year sparked a rally on Wall Street on Wednesday that also saw many gambling stocks rise.
Dow Jones, S&P 500, and Nasdaq all closed higher on the day, with the Dow passing 37,000 points for the first time, closing at 37,090.24.
The final policy decision of the year by America’s central bank was a welcome Christmas gift for investment bankers and company bosses alike. Federal Reserve chairman Jerome Powell told reporters that it would be premature to declare victory, but that rates were “likely at or near” their peak.
At the same time, he cautioned that “uncertainties and risks” remain and that “the committee is proceeding carefully.” While the policy makers decided to keep interest rates at a 22-year high at their latest meeting, the prospect of 75 basis points worth of cuts next year had a positive effect on the market.
Almost all the big names in the world of gambling were up following the news, with Bally’s, Caesars Entertainment, Flutter, Aristocrat Leisure Limited, Wynn Resorts and many others seeing their share prices rise noticeably on the day.
Jerome Powell’s announcement that the Fed did not want to restrict the economy longer than necessary was clearly a welcome indication that better days are ahead, and all signs are set on business expansion again.
It’s not all good news, however, with Powel also stating that inflation is still too high, despite it already having come down without a significant increase in unemployment, which was a positive development.
Economic projections also showed that members of the committee expect economic growth to slow from 2.6 percent this year to 1.4 percent in 2024, and for US unemployment to rise from 3.8 percent to 4.1 percent.
