The stock market was quiet until the Fed’s statement crossed at 2 p.m. ET, when it first dipped and then rebounded to close little changed.
Here’s the scoreboard:
- Dow: 22,376.49 +5.69 (0.03%)
- S&P 500: 2,505.58 -1.07 (-0.04%)
- Nasdaq: 6,448.87 -12.45 (-0.19%)
- 10-year yield: 2.277%, +0.033
- The Federal Reserve on Wednesday said it would embark next month on its biggest post-recession policy shift since it first raised interest rates at the end of 2015. The central bank confirmed, as expected, that it would start trimming the $US4.5 trillion balance sheet it built up after the Great Recession.
- The new dot plot is slightly more dovish in the long term. The median member again saw the Fed funds rate ending in a range between 1.25 and 1.5% at the end of 2017, suggesting one more hike this year. In the longer term, the median member expects rates to settle around 2.75%, down from 3%.
- The Fed raised its outlook for the US economy but cut inflation expectations. It now expects real GDP to grow 2.2% to 2.5% in 2017, up from June’s projection of 2.1% to 2.2%. Its expectation for the unemployment rate to fall to 4.2% to 4.3% this year is unchanged. It now says core personal consumption expenditures will come in at 1.5% to 1.6% in 2017, down from prior expectations of 1.6% to 1.7%.
- Apple fell 2% following disappointing reviews of the Apple Watch Series 3. Some marquee features of the watch, like voice calls and Siri, failed to work reliably because of its shoddy cell connection.
- Traders are making huge bets that the Toys R Us bankruptcy will crush Mattel, one of its main suppliers. Short interest on Mattel’s stock — a measure of wagers that share prices will drop — has climbed to 16% of shares outstanding, according to IHS Markit. It has more than tripled since April and now sits at the highest since February 2016.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.