The Dow Jones Industrial Average rose 221.71 points, or 0.67%, to 33,274.58, the S&P 500 gained 44.06 points, or 1.05%, to 4,237.86 and the Nasdaq Composite added 210.23 points, or 1.64%, to 13,061.47.
Investors have shown "less pessimism," Pursche added. "First- and second-quarter calls had a more negative tone. There was anxiety over interest rates, Fed policy, the recession that never came."
The updated projections see the Fed funds target rate edging down to 5.1% by the end of next year, and to 3.9% by the end of 2025. Since the Fed began tightening in March, core inflation has cooled. But its slow descent toward the central bank s 2% target has been slow and uneven. The SEP forecasts inflation to drop to 3.3% by year-end, and to approach the central bank s average annual 2% target.
All three major stock indexes rose as investors digested last Friday s comments from Fed Chair Jerome Powell that the U.S. central bank may need to raise interest rates further to ensure inflation is contained.
Wall Street s main indexes closed with slight gains in a shortened session, boosted by Tesla s surge and strong performances from bank shares. Tesla s shares rose 6.9% after the company announced record vehicle deliveries in Q2. Major banks also saw gains as they raised dividends following the Federal Reserve s health check. However, trading volumes were lower than average ahead of the July 4th holiday, indicating cautious market sentiment. The Dow Jones Industrial Average rose 0.03%, the S&P 500 gained 0.12%, and the Nasdaq Composite added 0.21%. The U.S. Treasury yield curve also signaled concern about the economy as it reached its deepest inversion since 1981.