Fed rate hike, Fed's Powell hopes dashed

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Fed rate hike, Fed's Powell hopes dashed

Despite a Federal Reserve interest rate hike and Chair Jerome Powell's hopes of an interest rate cut this year, the late afternoon sell off came despite the late afternoon sell off.

The FOMC CommitteeFOMC Committee earlier indicated that interest rate hikes would continue until inflation was tamed back to two percent.

I don't think we're going to cut rates this year if our outlook is true, Powell said at a press conference after the FOMC decision.

If inflation comes down much more quickly, that will be a factor in our policy setting, he said.

Soon after the FOMC decision, the U.S. dollar started to move higher, pushing the euro to the 1.0900 level and the British pound below 1.2300. The Australian dollar had crumbled to be close to 0.7050. As the afternoon wore on, buyers began to weigh into the market.

If you were hoping for clear signs of an upcoming pause in interest rate hikes, you were left wanting. Greg McBride, Chief Financial Analyst at Bankrate, told Reuters that the Federal Reserve has left their options open based on what upcoming economic data says.

The euro, which had approached 1.0900 at one point and rallied to touch 1.1001, retreated slightly to 1.0986, after approaching the U.S. close Wednesday. The British pound, which had been trading below 1.2300 earlier in the day, went to 1.2370 around the U.S. close.

The Swiss franc increased to 0.9085.

The Australian dollar rebounded to 0.7132. U.S. stocks had a roller coaster ride with the Dow Jones before the rate decision was down hundreds of points. It was back in the black by the close.

The benchmark index closed at 34,092, up 6.92 points or 0.02 percent. The Nasdaq Composite was up by 231.77 points or 2.00 percent to close Wednesday at 11,816. The Standard and Poor's 500 went up 42.61 points or 1.05 percent to 4,119.