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Dow closes above 37,000 for first time ever as Powell hints at rate cuts

The Dow roared to a new all-time high hitting 37,000 after Fed Chairman Jerome Powell said policymakers have nearly licked inflation and rate cuts could be in the cards.

The Dow Jones Industrial Average closed above 37,000 for the first time in history after Federal Reserve Chairman Jerome Powell signaled, for starters, that policymakers are likely done raising interest rates and cuts could soon be in the cards.

"We believe that we are likely at or near the peak rate for this cycle. Participants didn't write down additional hikes that we believe are likely. So that's what we wrote down. But participants also didn't want to take the possibility of further hikes off the table. So that's really what we were thinking," Powell said during a press conference following the decision. 

Policymakers, in their annual projections, priced in the potential of three rate cuts, with the federal funds rate falling to a range of 4.4% to 4.9%, down from the current 5.25% to 5.50%.

The Dow Jones Industrial Average added 512.30 points, or 1.4%, on Wednesday. The Nasdaq and S&P 500 gained 1.38% and 1.3%, respectively. 

This is the first record close for the Dow since January 2022, with the benchmark up over 11% for 2023 as of Wednesday. 

"This is great news for the equity market and the U.S. economy," said Wharton University professor Jeremy Siegel during an appearance on "The Claman Countdown" following Powell's presser. He predicts the first potential rate cut will come in March, in line with the CME's FedWatch Tool. 

As for the economy, inflation, while easing, remains a wildcard for policymakers. 

"Inflation has eased from its highs and this has come without a significant increase in unemployment. That's very good news, but inflation is still too high. Ongoing progress in bringing it down is not assured and the path forward is uncertain," Powell added. 


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