Federal Reserve leaves interest rate unchanged

Mike Finnegan

Janet Yellen, Chairman of the Federal Reserve, left interest rates unchanged on Wednesday, a move in line with investor expectations. However, the 
continued push back in the highly anticipated raise in the interest rate scheduled for this year makes an interest rate hike at the next meeting all the more likely. The 
probability of an interest rate increase at the the meeting on Nov. 1 and 2 now stands at 59 percent.

As a result of the steady interest rate, the Nasdaq, Dow Jones Industrial Average and S&P 500 all rose roughly 1 percent. The dollar weakened in the currency market, while the yield on U.S. Treasury bonds fell.

The Bank of Japan announced that it would be furthering its long-lasted effort to boost inflation. The result was a 1.9 percent jump in Nikkei Stock Average. Similarly, the quantitative performance measure of Europe’s stock market, the Stoxx Europe 600, increased .04 percent.

Bank stocks rose in the U.S., Japan and in Europe. The Wall Street Journal identifies the increase in Japanese bank’s shares as coming from the fact that interest rates did not retreat into negative numbers.