US stocks climbed on Friday, rebounding from a heavy sell-off earlier in the week sparked by a hawkish message from the Federal Reserve. The S&P 500 shrugged off early declines to trade 1.5 per cent higher by late morning. On Wednesday, the Fed triggered an equity rout when it scaled back the number of interest rate cuts it expected next year amid signs of stubbornly high inflation.
07 percentage points to 4.5 per cent on Friday after the inflation figures, having earlier this week touched a six-month high of 4.59 per cent. In comments that highlighted the debate within the Fed over the path of rates, Cleveland Fed president Beth Hammack said on Friday she would prefer to keep borrowing costs on hold until there was “further evidence that inflation is resuming its path” to the central bank’s 2 per cent target.