Category: Markets / Finance / March 20, 2013 5:38 PM EDT
Jonathan Corpina, senior managing partner at Meridian Equity Partners, weighs in with IBTimes TV's Jessica Menton about the Federal Open Market Committee's (FOMC) announcement, as well as Federal Reserve Chairman Ben Bernanke's speech on the heath of the U.S. economy.
Wall Street advanced on Wednesday following the FOMC's announcement that the Federal Reserve would continue its current monetary policy despite recent positive U.S. economic data.
Bernanke addressed the media at 2:30 Eastern Wednesday, after the Fed’s two-day policy meeting, saying that moderate growth has returned and the Fed will stay on course with stimulus. Bernanke reiterated that the central bank will continue the pace of its asset purchases, which have remained at $85 billion per month since last year; however, Bernanke hinted that the Fed could adjust the decision in the future.
"When we see that the situation has changed in a meaningful way, then we may well adjust the pace of purchases," Bernanke said.
Although there have been improvements in the labor market, they were not enough to stop the stimulus efforts, which also include keeping short-term interest rates near zero. The unemployment rate fell to 7.7 percent in February, the lowest level since the end of 2008, as the U.S. economy added 236,000 net jobs.
Data on Tuesday showed housing starts rose 0.8 percent in February to a 917,000-unit annual rate, the Commerce Department reported. In addition, permits for future construction jumped 4.6 percent to a 946,000-unit rate, the quickest since June 2008.
The Dow Jones industrial average recently saw its longest winning streak in over 16 years, as the S&P 500 has been edging closer to a record closing level.
"We'll need to see sustained improvement. One month, two months doesn't cut it" said Bernanke.
The Dow Jones industrial average .DJI gained 55.91 points, or 0.39 percent, to close at 14,511.73. The Standard & Poor's 500 Index .SPX was up 10.37 points, or 0.67 percent, to finish at 1,558.71. The Nasdaq Composite Index .IXIC rose 25.09 points, or 0.78 percent, to close at 3,254.19.