Markets rise, Fed commits to more bond buying

Markets rose on Wednesday.

The S&P 500 rose 0.2 percent, the STOXX Europe 600 rose 0.8 percent and the Nikkei 225 rose 0.3 percent.

The Federal Reserve left interest rates near zero at its monetary policy meeting on Wednesday and said it would buy at least US$120 billion of bonds each month “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals”.

The Fed decision came even as Fed officials elevated their outlook on the economy. The median expectation for US GDP in 2020 is now a decline of 2.4 percent compared with the 3.7 percent decline in September.

At the news conference after the meeting, Fed Chairman Jerome Powell said in response to a question that asset prices are “a little high” but is not concerned because interest rates are low.

In Europe, stocks rose as the EU signalled progress in talks over a post-Brexit trade agreement with the UK. “There is a path to an agreement now,” European Commission President Ursula von der Leyen said on Wednesday.