Shares lifted by Fed's patience on interest rates

Fed officials last month raised their benchmark rate by a quarter percentage point to a range between 2.25% and 2.50% and penciled in two increases this year, assuming the economy would grow about 1.9%, the annual rate they see as likely over the long run.

However, Fed had lowered the growth forecast of the United States economy to 2.3 percent during the latest rate hike in December.

The Bureau of Economic Analysis (BEA), an office under the U.S. Department of Commerce, has already stopped updating data for weeks due to the shutdown.

Wall Street extended its rally into a fifth straight day on Thursday in a session of whipsaw trading as investors responded to mixed comments by Federal Reserve Chairman Jerome Powell, while a warning from Macy's pummeled retail stocks.

Asked what qualifies for "normal", Powell said "I don't know the exact level."He noted that the balance sheet has declined to about $4 trillion, but that before the 2008 crisis it was below $1 trillion".

"Chairman Powell chose to make no news at his latest interview". In October, it rose 0.3 percent.

St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore, Oct. 8, 2018. Big picture: "they don't have that much further to go and they don't have to go there fast", said Robert Tipp, chief investment strategist with PGIM Fixed Income in Newark, New Jersey.

"Notwithstanding strong economic growth and a low unemployment rate, inflation has surprised to the downside recently, and it is not yet clear that inflation has moved back to 2 per cent on a sustainable basis, " Clarida said.

Mr. Clarida said monetary policy, after four rate increases past year, isn't on "preset course".

World Bank, an worldwide financial institution, also expected the growth rate of the USA economy would drop to 2.5 percent in 2019.

December figures for the Fed's preferred gauge of inflation - a separate measure related to consumption - are scheduled for release on January 31, though the report could be delayed because of the partial government shutdown.

He also said that the Fed had no preset path for rate hikes and would be "patient" when determining whether to hike interest rates further in response to strong US growth that risks sparking inflation, or to pause rate hikes to account for a global economic slowdown. The principal worry is global growth, he said in questioning by David Rubenstein, the co-founder of private-equity firm Carlyle Group, where Powell was previously a partner.

Vanessa Coleman