NEW YORK (
(C - Get Report)
was the winner among the largest U.S. financial names on Wednesday, with shares rising nearly 1.5% to close at $37.53.
The broad indexes ended mixed after the
Federal Reserve Open Market Committee
(FOMC) announced that after central bank's current program of purchasing $45 billion in long-term U.S. Treasury Securities each month while selling an equivalent amount of short-term Treasuries is completed at the end of the year, it will continue the purchases "initially at a pace of $45 billion per month." There was no mention of the sale of short-term Treasury paper, and the Fed said that it would continue its purchases of mortgage-backed securities at the pace of $40 billion per month, for what will be a major expansion of the central bank's balance sheet.
The Fed's short-term federal funds rate has been within a target range of zero to 0.25% since the end of 2008, and the central bank previously indicated that it would hold the line on rate increases until 2015.
The FOMC on Wednesday tied the eventual increase in rates to economic benchmarks, saying that the "exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."
This was the first time the Federal Reserve tied the federal funds rate directly to the unemployment rate.
Federal Reserve chairman
said later during a press conference that "clearly the Fiscal Cliff is having effects on the economy," according to an Associated Press report. Bernanke urged President Obama and Congress to quickly come up with a compromise budget agreement to avoid mandatory tax increases and budget cuts, as central bank actions "cannot offset the Fiscal Cliff. It's just too big."
KBW Bank Index
rose slightly to close at 49.71, with 16 of the 24 index components showing gains.
Citi's International Appeal
Citigroup's shares have now returned 43% year-to-date, following a 44% decline during 2011.