Canadian stocks across sectors bounced back sharply on Wednesday after the U.S. Federal Reserve not only decided to hold interest rates steady at 5.25% to 5.5% for the third consecutive meeting but also hinted toward the possibility of multiple rate cuts in the next year. As the latest shift in the American central bank’s monetary stance gave investors a reason to cheer, the S&P/TSX Composite Index zoomed up by 396 points, or 2%, yesterday to settle at 20,629 — its highest closing level since May 2023.
A shift in the Fed’s monetary stance
Interestingly, based on its latest economic projections, the Fed now expects the federal funds rate to be in a range of 3.9% to 5.4% in 2024, lower than its earlier projection range of 4.4% to 6.1%.
Besides the Fed’s big announcement, the release of cooler-than-expected U.S. wholesale inflation data for November also added optimism. While all main market sectors ended in the green, metal…
