U.S. stocks rose, the dollar fell and Treasuries erased losses as the Federal Reserve signaled the pace of tighter monetary policy will be gradual even as the central bank prepares to lift interest rates this year.
The Standard & Poor’s 500 Index rose 0.2 percent at 4 p.m. in New York, erasing declines on the Fed’s statement. The Bloomberg Dollar Spot Index dropped 0.7 percent, reversing gains. The yield on 10-year Treasury notes was little changed at 2.32 percent after rising to 2.40 percent earlier. Gold jumped 0.5 percent, while oil fluctuated near $60 a barrel.
The Fed maintained its forecast that the benchmark interest rate would rise to 0.625 percent this year, and lowered its projection for next year. While officials lifted their assessment of the labor market and the economy, Chair Janet Yellen said policy makers want to see more decisive evidence on growth, and that she anticipates only gradual increases in borrowing costs will be warranted.
Officials held the benchmark overnight fed funds rate in a zero to 0.25 percent range, where it has been since December 2008, during the worst recession since the Great Depression. The decision was unanimous. The Fed also cut the top end of its projection for 2015 gross domestic product gains by 0.7 percentage point to 2 percent.