U.S. stocks hit record highs in Wednesday’s trading, with the Dow Jones Industrial average exceeding 21,000 for the first time.
U.S. stock markets have been hitting a series of record highs since the election of President Donald Trump, who encouraged businesses by promising to cut taxes and regulations, and make major investments in rebuilding roads, bridges and other infrastructure. Trump repeated these pledges Tuesday evening in an address to both houses of congress, but has not offered many details of these plans.
Investors were also encouraged Wednesday when top officials of the U.S. central bank said they were closer to raising interest rates. Some investors see raising rates as a signal that the U.S. economy no longer needs the boost it gets from ultra low interest rates. The Federal Reserve slashed rates to record-lows during the recession in a bid to boost economic growth and fight unemployment.
While low interest rates are intended to increase economic activity, the Fed raises rates to fend off inflation. Wednesday, the U.S. Census Bureau reported that inflation is moving closer to the two percent annual rate that experts say helps the economy achieve stable prices and full employment. PNC Bank economist Gus Faucher says this and similar reports make it more likely that the Fed will raise rates. Reports in the financial press say that rate hike might come as early as March 15.