Global stock markets approached record levels after the US Federal Reserve (Fed) announced that it would carry out asset purchase reductions at the level expected by financial markets.

Global stock markets approached record levels after the Fed announced that it will realize its asset purchase reductions at the level expected by the financial markets and will be patient with interest rate hikes.

The MSCI World Index rose 0.12 percent to its historic high. The S&P 500 index finished the day at a record high of 0.65% in the USA, and the Nasdaq 100 climbed more than 1%. Dow Jones and Russell broke the record in 2000. Futures trading continues to rise this morning. In Asia, Japanese Nikkei, Chinese CSI 300, and South Korean indexes are up.

Nancy Davis, CIO of Quadratic Capital, predicted that it would make sense to begin tapering off asset purchases and would allow the yield curve to steepen and normalize.

For the first time in more than five years, the US Treasury reduced the amount of quarterly sales of long-term bonds. The US 10-year bond yield, which closed yesterday with an increase of 5 basis points, is flat, just below 1.60 percent this morning.

Markets Expects First Rate Hike in July

After the Fed decision, inflation expectations in the bond market rose, while traders’ expectations for the timing of the first-rate hike remained unchanged. Accordingly, the first increase is foreseen in July, and an increase of approximately 55 basis points is priced until the end of 2022.