June 25, 2008

Fed Holds Rates Steady, Market Explodes

Category: Market Updates – Kristina Zurla Landgraf – 4:33 pm

The Federal Reserve left interest rates steady as expected, but policymakers’ statements on the economic outlook caused frenzied post-meeting trade. Stock index futures quickly rose after the Fed said downside risks to U.S. economic growth have “diminished somewhat” but the market also was cognizant of statements of upside risks to inflation that tempered enthusiasm. September S&P futures hit an intraday high of 1337.75, although lost some steam into the close and ended up 7.10 at 1322.0. Preliminary volume in the E-mini S&P shows more than 2 million contracts traded. The market has slipped further in after-hours trade.

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