Global equities continued to attract buyers as blowout results from Apple drove market sentiment, overshadowing a Federal Reserve policy statement and some gloomy economic news on both sides of the Atlantic.
The Fed left interest rates unchanged and reiterated that economic conditions were likely to warrant exceptionally low levels for the federal funds rate until at least late 2014. The central bank made only minor changes to its assessment of the economy, acknowledging that inflation had picked up “somewhat” but continuing to note the economy had been expanding “moderately” while the jobless rate was “elevated”.
“We therefore take the view that while a third round of quantitative easing remains a possibility, it will require an external shock – oil or an escalation of the sovereign debt crisis – for the Fed to pull the trigger,” said James Knightley, economist at ING.