Wall Street just got a shot in the arm from the Federal Reserve.
Stocks notched fresh highs — with the S&P briefly topping 3,000 for the first time ever — after the Fed signaled it’s poised to cut interest rates for the first time in more than a decade, citing worries over trade tensions and growth.
The Fed’s skittish outlook for the economy — which meanwhile downplayed the risks of inflation despite a strong job market — sent stocks roaring as it strengthened the central bank’s case to take action to prolong an 11-year expansion.
While the US economy has performed “reasonably well” this year, “crosscurrents, such as trade tensions and concerns about global growth, have been weighing on economic activity and the outlook,” Fed Chair Jerome Powell said in prepared remarks ahead of his two-day testimony before Congress.
Minutes from the Federal Open Market Committees June meeting — released Wednesday afternoon — likewise showed Fed participants acknowledged “uncertainties and downside risks surrounding the economic outlook had increased significantly over recent weeks.”
The Dow Jones industrial average soared nearly 200 points — or 0.7 percent in early trades — to a record 26,983.45 before retreating to close up 0.3 percent at 26,860.20.
“We had a celebration at the opening,” Bruce Bittles, chief investment strategist at Baird, told The Post, adding “There was a pullback because a lot of anticipation is already built into the market.”
The S&P 500 and Nasdaq ended up 0.5 percent and 0.8 percent.
Although many anticipate rate cuts, certainty wavered last week after the Labor Department reported that the economy added 224,000 jobs to the economy in June, eclipsing forecasts of 165,000.
But that dose of surprisingly good news wasn’t enough to convince the Fed that the broader economic picture doesn’t look iffy.
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“While that’s a constructive step, it doesn’t remove uncertainty we see as overall weighing on the outlook,” Powell said Wednesday in response to a question posted by Rep. Carolyn Maloney (D-NY).
After raising rates four times last year, the Fed has indicated in January that it would be “patient” with future hikes.
President Trump has lambasted Powell — whom he appointed as Fed chair in late 2017 — for rate hikes, arguing that they’ve slowed economic and stock market gains.
“They raised rates too soon, too often, & tightened, while others did just the opposite,” Trump tweeted Friday, adding that the Fed “doesn’t have a clue!”
Powell reiterated his intention to serve his four-year term despite criticism from Trump, who reportedly has been looking for ways to remove him from his post.
“If you got a call from the president today or tomorrow and he said, ‘I am firing you, pack up, it is time to go,’ what would you do?” asked Rep. Maxine Waters (D-CA), who serves as chair of the House Financial Services Committee.
“Of course, I would not do that,” Powell responded, before Waters asked him to repeat himself.
“I have kind of said what I intended to say on the subject and what I said is the law clearly gives me a four-year term and I fully into to serve it,” Powell said.