U.S. stock benchmarks on Wednesday afternoon were pivoting modestly higher as the Federal Reserve held interest rates steady, as expected, but quickened the pace of wind-down of its bond-buying program, opening the door to interest-rate increases in the first half of 2022.
Projections from the Fed point to three rate increases next year, with the current fed-funds rate at a range between 0% and 0.25%. Fed Chairman Jerome Powell will host a news conference at 2:30 p.m. ET to discuss the central bank's updated policy.
The move to end the stimulus program sooner than officials planned at their meeting last month offers the most concrete sign of how Powell's focus has shifted toward preventing higher inflation from becoming entrenched.
But the updated policy comes as the omicron variant of the coronavirus that causes COVID-19 spreads, sparking fresh concerns about economic recovery and supply-chain bottlenecks that have helped underpin rising inflation.
The Dow Jones Industrial Average popped into positive territory, up 0.3% at 35,645, the S&P 500 index climbed 0.3% to 4,650, and the Nasdaq Composite Index briefly climbed to less than 0.1% higher at 15,269. The 10-year Treasury note yields 1.46% from around 1.44% before the Fed update.
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