Fed raises rates but Fed Chief Powell's comments power up the markets

Fed Rate Hike : The Federal Reserve raised rates by yet another 75 bps and kept the door open for a another hike. The markets however rallied sharply in the US despite the rate hike as Fed Chief Jerome Powell said he does not think the US is currently in a recession. With 75 bps done again, it takes the cumulative June-July increase to 150 basis points, which is the steepest move up since the early 1980s.

The Fed's latest hike lifts the benchmark short-term rate to its highest level since 2018. The central bank is betting that it can slow growth just enough to tame inflation yet not so much as to trigger a recession.

The Dow Jones Industrial Average closed 1.37% higher, or 436 points, to close at 32,197.

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The S&P 500 gained 2.6%- 102 points higher at 4,023 while the technology heavy Nasdaq jumped by 4.06% - the most in over two years - to close 469 points higher at 12,032.