Business

Markets roar on Fed rate news

Dovish comments contained in the Federal Reserve minutes from March sent a clear signal to the stock markets on Wednesday: Buy.

The minutes showed that, internally, the Fed played down forecasts by some of its own policy makers that interest rates might rise faster than they previously predicted.

“Several participants noted that the increase in the median projection overstated the shift in the projections,” according to minutes of the March 18-19 meeting of the Federal Open Market Committee. Some expressed concern the rate forecasts “could be misconstrued as indicating a move by the committee to a less accommodative reaction function.”

US stocks rose while Treasuries pared declines after the minutes eased concern about the timing of future interest-rate increases. Even after rates rise, officials said last month, they might have to be kept at levels considered below normal for longer because of tighter credit, higher savings and slower growth in potential output.

The minutes reinforce Fed Chairwoman Janet Yellen’s message at her debut press conference last month that the rate forecasts of policy makers are less important than the Fed’s post-meeting statement.

Both the Dow industrials and the S&P 500 index surged 1.1 percent, while the Nasdaq composite index added 1.7 percent on Wednesday.