Major stock indexes rose to new highs on Friday after Federal Reserve Chairman Jerome Powell stressed the Fed should not overreact to a recent rise in inflation.
The S&P 500 advanced 0.9% after Powell’s long-awaited speech at the Jackson Hole virtual conference. If current gains are maintained, the index would set a record and close above 4,500 points for the first time.
The Nasdaq Composite, which has had a lot of technology, rose 1.1%, which was also set in motion to set a record. The Dow Jones industrial average rose 0.7%.
Investors were overseeing Powell’s speech for clues as to when the Fed could begin reducing its easy money policies. The central bank has made $ 120 billion in monthly asset purchases to help the economic recovery, while maintaining its short-term reference interest rate at zero. These policies have helped boost major stock market indices to all-time highs.
The minutes of the Fed’s policy meeting in late July showed that many of the officials thought asset purchases could begin to slow later this year. This week, more regional Fed leaders said it was time to cut the central bank’s stimulus campaign.