Volkswacht Bodensee - US indices hit records as Fed confirms plan for 2024 rate cuts

The US central bank as expected opted to keep interest rates unchanged for a fifth consecutive meeting.

The Fed also stayed the course in its forecast for three rate cuts in 2024, despite recent inflation data that topped estimates.

"Inflation is still too high," Fed Chair Jerome Powell told a news conference.

But despite the recent uptick, Powell said this year's inflation data "haven't really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward two percent."

Keeping the three rate cuts on the outlook allowed the market "to breathe a sigh of relief," said Briefing.com analyst Patrick O'Hare, adding that investors also welcomed Powell's characterization of the economy as relatively strong.

Fed policymakers also updated their economic forecasts, sharply upgrading the US growth outlook for this year to 2.1 percent, from 1.4 percent in December

The three major US indices pushed to all-time closing records, with the Nasdaq winning the most at 1.3 percent.

Meanwhile the dollar retreated against the euro and the pound.

Earlier, London and Frankfurt finished little changed.

But Paris' luxury-heavy CAC 40 index fell 0.5 percent after French giant and Gucci-owner Kering issued a profit warning over weak Chinese demand.

"This is causing concern that other luxury houses could see a similar downturn in demand from this important market," said Kathleen Brooks, an analyst at XTB.com.

Kering shares closed down 12 percent in Paris, its worst single-day decline ever.

LVMH fell 1.4 percent and Hermes was little changed. In London, Burberry shed more than three percent.

London stocks were largely flat even though UK inflation fell more than expected, fueling speculation that the Bank of England could start cutting its key rate in June rather than later in the year.

In the eurozone, European Central Bank President Christine Lagarde warned of the risk of acting "too late" on interest rate cuts, reaffirming the likelihood that the first reduction in the bloc's borrowing costs would come in June.

"We cannot wait until we have all the relevant information," Lagarde said at a conference in Frankfurt.

But she also declined to pre-commit to an interest rate path once that first cut has been made.

- Key figures around 2030 GMT -

New York - Dow: UP 1.0 percent at 39,512.13 (close)

New York - S&P 500: UP 0.9 percent at 5,224.62 (close)

New York - Nasdaq: UP 1.3 percent at 16,369.41 (close)

London - FTSE 100: FLAT at 7,737.38 (close)

Paris - CAC 40: DOWN 0.5 percent at 8,161.41 (close)

Frankfurt - DAX: UP 0.2 percent at 18,015.13 (close)

EURO STOXX 50: DOWN 0.2 percent at 5,000.31 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 16,543.07 (close)

Shanghai - Composite: UP 0.6 percent at 3,079.69 (close)

Tokyo - Nikkei 225: Closed for holiday

Dollar/yen: UP at 151.36 yen from 150.86 yen on Tuesday

Euro/dollar: UP at $1.0923 from $1.0866

Pound/dollar: UP at $1.2782 from $1.2722

Euro/pound: UP at 85.44 from 85.41 pence

West Texas Intermediate: DOWN 2.1 percent at $81.68 per barrel

Brent North Sea Crude: DOWN 1.6 percent at $85.95 per barrel

burs-jmb/nro

D.Schaer--VB