Introduction: Markets gain after Federal Reserve points to longer support
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The one constant through the coronavirus crisis has been the willingness of the Federal Reserve and other central banks to stand behind markets. They were at it again last night in Washington, with minutes from the latest monetary policy meeting giving the soothing message that support is here to stay.
Stock markets in Europe rose on Thursday in early trading after the Fed said it expected to keep loose monetary policy for “some time” until conditions improve sufficiently. The FTSE rose by 0.3% in opening trades on Thursday morning, while the Stoxx 600 index of big European companies gained 0.4%.
Lael Brainard, a Fed governor, told CNBC that policymakers expect “considerably better outcomes on growth, and employment and inflation” in coming months. “But that is an outlook,” she said. “We are going to have to actually see that in the data,” and with millions of jobs still missing due to the pandemic “we have some distance to go.”
Naeem Aslam, an analyst at Avatrade, an online investing platform, said:
Traders have finally understood that there will be no early exit from loose monetary policy. The US economy needs to recover fully, and it will be some time before that happens.