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* Federal Reserve raises rates 75 basis points
* Wall St stocks rally as Powell speaks, dollar loses ground
* U.S 10-yr Treasuries yield falls
* Energy in focus with Europe/Russia gas crisis (Updates prices to late afternoon adds commentary)
By Sinéad Carew and Sujata Rao
NEW YORK/LONDON, July 27 (Reuters) - U.S. equities rose sharply and the dollar lost ground as investors bet the Federal Reserve would slow interest rate hikes following its announcement on Wednesday of an increase in rates in line with expectations.
Oil futures settled higher after a report of lower inventories in the United States, while cuts in Russian gas flows to Europe offset concerns about weaker demand and higher U.S. interest rates.
Ten-year U.S. Treasury bond yields - the reference rate for the global cost of capital - were volatile but pared most of their declines after Fed Chair Jerome Powell spoke to reporters following the central bank's increase of its benchmark overnight interest rate by three-quarters of a percentage point.
The Fed is pushing up rates to cool the sharpest inflation since the 1980s and signaled "ongoing increases" in borrowing costs may still be ahead despite evidence of a slowing economy.
Powell told reporters it will likely be appropriate to slow the pace of increases as rates get more restrictive and that the Fed wants to get to moderately restrictive levels by year-end.
He also said that a lack of visibility into the economy's future trajectory means the Fed can only provide reliable guidance on a "meeting by meeting" basis.
Some strategists pointed to Powell's lack of guidance for a specific rate hike in September and his comment that previous hikes would keep reducing inflation as potentially dovish signs.
While most asset classes chopped around after the Fed Statement came out at 2 p.m. ET (1800 GMT), stocks rose sharply as Powell spoke and Treasury yields took a dive before regaining ground.
The Dow Jones Industrial Average rose 436.05 points, or 1.37%, to 32,197.59, the S&P 500 gained 102.56 points, or 2.62%, to 4,023.61 and the Nasdaq Composite added 469.85 points, or 4.06%, to 12,032.42.
MSCI's gauge of stocks across the globe gained 1.71%.
"The Fed's comments suggest the pace of rate hikes will slow considerably in the coming months," said George Bory, chief investment strategist for fixed income with Allspring Global Investments.
Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis noted that Powell "acknowledged the weakness showing up in real economic growth" and was waiting for economic data in the next few months before giving guidance.
So this could mean "even slower real growth and better inflation data suggesting not much more may be needed," Paulsen said.
Jack Ablin, chief investment officer and founding partner at Cresset Capital in Chicago said Wednesday's hike highlighted the most aggressive series of Fed moves since the 1980s when Paul Volcker was the Fed chair.
He added that anything other than the 75 basis point increase would have been negative: "Too little would've undermined confidence in the Fed and too much would have undermined confidence in the economy."
The dollar index fell 0.625%, with the euro up 0.79% to $1.0194.
The Japanese yen strengthened 0.26% versus the greenback at 136.58 per dollar, while Sterling was last trading at $1.2153, up 1.06% on the day.
Benchmark 10-year notes last rose 2/32 in price to yield 2.7794%, from 2.787% late on Tuesday. The 30-year bond last fell 34/32 in price to yield 3.0628%, from 3.008%. The 2-year note last rose 4/32 in price to yield 2.9797%, from 3.043%.
The market was also boosted on Wednesday by quarterly updates from Microsoft Corp and Alphabet Inc that helped spark a relief rally in technology and growth shares as they boosted investor confidence in Big Tech's ability to navigate a recession.
But weighing on the mood was Europe's fragile energy situation with gas flows from Russia's Nord Stream 1 pipeline halving on Wednesday from already reduced levels.
A complete cut-off of Russian gas to Europe by year-end and a further 30% drop in oil exports may lead to virtually zero European and U.S. growth next year, the IMF warned.
In energy markets U.S. crude settled up 2.4% at $97.26 per barrel and Brent settled at $106.62, up 2.13% on the day.
Spot gold added 1.0% to $1,734.14 an ounce.
(Reporting by Sinéad Carew, Caroline Valetkevitch, Chuck Mikolajczak, Sujata Rao, Tom Westbrook, Ashitha Shivaprasad, and Dhara Ranasinghe Editing by Jane Merriman, Lisa Shumaker and Richard Pullin)