Paradox: FED lowers US growth forecasts and S&P500 shoots up

Also, the American institution maintained interest rates in the 0%/0.25% range and lowered the estimate for US GDP growth in 2014 from +2.8%/+3.0% to +2.1%/2.3%. According to Bankinter Broker analysts, such lower growth forecast may suggest that the FED will maintain the rhythm in reducing the QE3 and that they will not rapidly raise the interest rates.

Paradoxically, the benchmark S&P 500 set intraday and closing record highs and gained 14.99 points or 0.77 percent, to 1,956.98, a record closing high. Such advance pushed the S&P 500 above its previous record closing high of 1,951.27, which was set on June 9.

The S&P 500 index has gained 1.1 percent for the week as investors largely shrugged off mounting tensions in Iraq and focused on a flurry of merger and acquisition activity as well as on better-than-anticipated manufacturing data.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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