Global stock markets rally as US central bank maintains rates
31 January 2019
With the Federal Reserve indicating that it will not raise interest rates for a while, global stock markets rallied on Thursday even as Treasury yields fell and the dollar sank.
Markets were taken by surprise by the ‘dovish’ stance of the Fed, which had last month indicated continuing with a tighter monetary policy. US President Donald Trump has been criticised for the frequent hike in rates.
Stock markets also shot up after Facebook came out with positive results. The company announced record fourth-quarter profits and said its user base continues to grow.
It posted $6.88 billion in net income for the quarter ended December 31, 2018, up from $4.27 billion a year ago. “Our community continues to grow,” said chief executive Mark Zuckerberg in an earnings call with investors.
Meanwhile, Jerome Powell, chairman, Federal Reserve, denied that Trump’s criticism had resulted in its decision to maintain interest rates. He said there were no political considerations influencing the Fed’s decision.
“What we care about, and really the only thing we care about at the Fed, is doing our job for the American people and using our tools,” he claimed. “We're always going to do what we think is the right thing, we're never going to take political considerations into account or discuss them as part of our work. We're human, we make mistakes, but we're not going to make mistakes of character or integrity.”