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Dow Jones Hits All-Time High After Fed Forecasts 2024 Inflation Cuts

The Dow Jones Industrial Average reached a record high Wednesday following the Federal Reserve's hold to keep interest rates steady. Photo Credit: Shutterstock

Posted December 13, 2023

The Dow Jones Industrial Average reached a new record high Wednesday, a jump of more than 500 points, following the central bank’s decision to hold rates steady due to progress on inflation.

The DOW increased more than 1.4 percent eventually closing at 37,090, surpassing its previous benchmark in January 2022. The Dow is not the only entity to increase its presence in the stock market as Nasdaq increased 1.38 percent to 14,733.96 and S&P 500 climbed 1.37 percent to 4,707.09.

This surge in stock market gains comes after the Federal Reserve decided to keep its overnight borrowing rate steady between 5.25 and 5.5 percent for the third consecutive month. The Fed hinted at inflation rates easing and predicted three rate cuts in 2024. It also lowered its 2024 inflation forecast from 2.6 percent to 2.4 percent.

Inflation rates reached as high as 9.1 percent in July 2022 and cooled to 3.1 percent as of Nov. 2023. While inflation rates have been easing month to month, consumers have not shown any recent signs of high spending. The Consumer Price Index for All Urban Consumers increased by 0.1 percent in November, according to the U.S. Bureau of Labor Statistics.