Dow climbs as Fed holds rates
Wednesday 21 May 1997
The decision was well received on Wall Street, and indicated that the Fed judged signs of a slowdown in economic growth to be real and believed there was no need to make any adjustment following the 0.25 percentage point rise two months ago.
The Dow Jones index swung by more than 100 points following the announcement to close at 7,303.46, up 74.58 on the day.
There has recently been an unusual degree of discussion and uncertainty over rates, with analysts divided on whether a rise was justified.
A majority, however, had forecast that there would be no change, whether or not it was justified.
Only a week ago, Alan Greenspan, chairman of the Federal Reserve, caused confusion when he said: "While there is scant evidence of any imminent resurgence of inflation at the moment, there also appears to be little slack in our capacity to produce." His statement led to wild swings on the stock market as first the early part of his sentence, then the second caught the attention of dealers.
The economic figures are contradictory. The economy grew more rapidly in the first quarter than it had for a decade - at an annual rate of 5.6 per cent - and unemployment fell further in April to 4.9 per cent, its lowest level for 23 years.
Both figures were cited as supporting the need for a rise, on the grounds that the growth rate needed to be restrained and such low unemployment would lead to wage rises.
- 1 Rape threats, death threats and a police investigation after video poking fun at an Islamic Party in Malaysia goes viral
- 2 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 3 Gamers confess the worst things they've done in The Sims
- 4 6-year-old writes ice cold Valentine's card to his stepmother
- 5 Syrian child photographed 'surrendering to camera because she thought it was a gun'
Rape threats, death threats and a police investigation after video poking fun at an Islamic Party in Malaysia goes viral
Why Robin Williams safeguarded himself against a morbid trend in advertising
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
6-year-old writes ice cold Valentine's card to his stepmother
Jeremy Clarkson to become 'special adviser on transport' to David Cameron
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
Katie Hopkins reported to the police for race hatred by Labour MP Simon Danczuk after tweet about Pakistani men
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...