North American stock markets backed off Wednesday amid worries that the U.S. Federal Reserve could end up raising interest rates as soon as the spring of next year.
The S&P/TSX composite index lost 34.94 points to 14,334.04 as the Fed moved to clarified its guidance on when it might raise short-term interest rates at the end of its two-day policy meeting.
The Fed reaffirmed its plan to keep short-term rates low. But it no longer mentions a specific unemployment rate that might lead it to eventually raise rates.
Instead, it will monitor a wide range of economic data before approving any rate increase.
Later, Fed chair Janet Yellen signalled that the central bank could begin raising short-term rates six months after it halts its bond purchases around year’s end.
The greenback and U.S. Treasury yields appreciated sharply after the Fed announcement while losses for the Canadian dollar deepened, with the loonie closing down 0.86 of a cent (U.S.) at 88.93 cents.
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