* New everywhere, updates prices, market activity and comments at the close of the United States
* Fed announces faster reduction in bond purchases
* US yields rise, curve flattens after Fed statement
* Wall Street ended sharply higher after Fed statement
By Elizabeth Dilts Marshall
NEW YORK, Dec 15 (Reuters) – Global stocks and bond yields rose on Wednesday after the U.S. Federal Reserve announced it would end its pandemic-era bond buying in March and start raise interest rates up to three times next year.
The new economic projections https://www.Reuters.com/markets/us/fed-prepares-stiffen-inflation-response-post-transitory-world-2021-12-15 predict that inflation will reach 2.6% l next year, from the 2.2% expected in September, and the unemployment rate will fall to 3.5%.
“The economy no longer needs increasing political support,” Fed Chairman Jerome Powell said at a news conference after the meeting.
MSCI’s global stock gauge gained 0.10% and the pan-European STOXX 600 index rose 0.26% on the news.
The S&P 500 gained 75.48 points, or 1.63%, to end at 4,708.37 points, while the Nasdaq Composite gained 330.94 points, or 2.17%, to 15,568.58. The Dow Jones Industrial Average rose 390.19 points, or 1.10%, to 35,934.37.
“The Fed hasn’t thrown any curveballs,” said Ryan Detrick, chief market strategist at LPL Financial. “The market seems to be taking matters into its own hands. It didn’t surprise anyone.”
The two-year US Treasury yield, which generally moves in line with interest rate expectations, rose 3.8 basis points to 0.697%.
The 10-year Treasury yield rose 2.4 basis points to 1.463% and the 30-year Treasury yield rose 3 basis points to 1.849%.
The dollar index fell 0.227%, with the euro up 0.31% at $1.1292. Spot gold was at $1,779 an ounce.
Inflation is also an issue elsewhere, with UK consumer price inflation hitting its highest level in over a decade at 5.1% in November, beating all economists’ forecasts ahead of a rate-setting meeting from the Bank of England on Thursday.
Investors have sharply increased their bets that the BoE is about to hike rates.
The European Central Bank meets on Thursday and is expected to trim stimulus a notch, but will pledge abundant support for next year, sticking to its long-held view that alarming inflation will subside on its own. same.
Oil prices edged higher on Wednesday, rebounding from early losses after U.S. inventory data showed strong consumer demand and the Federal Reserve signaled the economy was recovering.
But U.S. crude stabilized 0.20% at $70.87 a barrel and Brent 0.24% at $73.88 a barrel.
(Additional reporting by Huw Jones in London and Sujata Rao and Saikat Chatterjee; Editing by Alexander Smith, Alexandra Hudson, Jane Merriman, Philippa Fletcher, David Gregorio)
