Stocks remain boosted following Fed’s latest interest rate hike decision

Yahoo Finance Live anchors Dave Briggs, Seana Smith, and Julie Hyman react to Fed raising rates by 0.25% in the newest rate hike decision.

Video Transcript

SEANA SMITH: You have all three of the major averages now in the green. NASDAQ up just about a half of a percent, the Dow up about 8/10 of a percent. And guys, when we dig into this release that we're just getting here from the Fed, 25 basis point. Largely, that was the consensus out there in the Street in terms of what we are expecting, but they did do away with that ongoing rate increases language here within this statement. And they also reiterated the fact that the banks are sound, resilient, but those events to weigh on growth here in the future. So, a lot of this was largely expected going into this announcement.

DAVE BRIGGS: Absolutely. I think it would have been a real shock had they paused because, of course, what signal would that have sent that the banks weren't stable, and that probably would have incited a little panic. Of course, the markets were certainly would have loved it and would have responded. But let's-- can we check on the markets and see what they're doing at the moment as a reaction to it? Not a ton of movement. You are seeing a little bit. Julie, your reaction to 0.4% GDP growth this year. Pan back a little bit, and again, the language changing a little from prior statement.

JULIE HYMAN: Yeah, but at the same time, saying that some further firming might be appropriate. So they are not saying this is it. That's not the message that they're projecting at all. Some firming might further be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time. So 2% is not changing, right? They're not changed. They're not bringing up that inflation target, at least not at this point in time, which I think is important.

The comments on the banking system are important. Surely, Jay Powell is going to be asked more about that in the press conference. And then I'm trying to look at the dots here as well, which always take a little time to digest, right? But it looks like where we have the so-called median dot plot, if you will, where most of the dots are clustered appears to be between 5 and 5 and 1/4 for the end of 2023. And that looks like that would be the terminal rate, if you will, the end of this hiking cycle. Between 5 and 5 and 1/4 is where we're looking at those dots before coming down through the course of 2024 and beyond.