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Fed sends S&P 500 to another record close

Credit: Reuters Studio
Published on October 30, 2019 - Duration: 02:04s

Fed sends S&P 500 to another record close

The S&P 500 closed at a record high after Federal Reserve Chairman Jerome Powell lowered interest rates and expressed confidence the economy can keep growing without another rate cut.

Conway G.

Gittens has the wrap-up.

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Fed sends S&P 500 to another record close

Wall Street went into rally mode Wednesday as Federal Reserve Chairman Jerome Powell cut interest rates and signaled he's ready for a pause.

SOUNDBITE (ENGLISH): FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "I strongly believe it's the right action.

I strongly believe that the actions we've taken over the course of this year have been the right things to do for this economy and are supporting economic growth and will continue to do so in the future." In the third rate cut this year, The Fed lowered its target range by a quarter-percentage point to 1-1/2 to 1.75 percent.

A move highly anticipated by investors - what they want to know now - is what happens next.

Powell hinted this economy is now strong enough for the Fed to hold off on any more rate cuts for the time being - thanks to a solid consumer.

SOUNDBITE (ENGLISH): FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "The performance of the economy has been -particularly the household sector - has been strong, has been resilient with low unemployment, attractive levels of job creation, wages moving up, labor force participation moving up, household confidence and solid gains in many measures of consumer spending.

We see the outlook as for more of the same.

We also see the risks to the outlook as perhaps having moved in a positive direction." He pointed to easing trade tensions between the U.S. and China, as well as signs Britain's exit from the European Union won't be as disruptive as feared for the optimism.

Confidence that a recession is now off the table was underscored by the latest economic numbers.

The U.S. economy slowed less than expected in the third quarter - growing at a 1.9 percent annual rate.

The power of the Fed's two previous rate cuts leading the housing market to its first rebound since late 2017.

Business investment, however, remains weak but not enough to keep Powell up at night.

He thinks a trade deal between the U.S. and China would quickly turn that around.

His optimism was enough to spark a late-day rally on Wall Street, all three major indices went from negative to positive; The S&P 500 set another record closing high.

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