Global equities rose slightly on Wednesday after the US Federal Reserve said it would stop buying bonds during the pandemic in March.
The announcement paves the way for interest rates to rise by three-quarters of a percentage point by the end of 2022 as the Fed withdraws from policies adopted at the start of the global health crisis.
In new economic forecasts released after the two-day policy meeting, officials forecast that inflation will be 2.6% next year, up from the 2.2% forecast for September, and that the unemployment rate will fall to 3.5%.
The MSCI World Stock Index rose 0.10% and the STOXX 600 pan-European index rose 0.26% following the Fed's announcement.
At 14:45 EST / 19:45 GMT, the Dow Jones Industrial Average rose 119.82 points, or 0.34%, to 35,664, the S&P 500 added 17.25 points, or 0.37%, to 4651.34 and the Nasdaq Composite added 23.45. points, or 0.15%, to 15,261.09.
The yield on 10-year US Treasuries was 1.4701% and the yield on 30-year bonds was 1.8545%.
The prospect of higher short-term rates supported the US dollar, especially against the euro and yen, where monetary policy is expected to lag.
The dollar index rose 0.15% and the euro fell 0.11% to $1.1245.
The risk of higher cash rates has been a burden on gold, which is not yielding fixed returns. Spot gold fell 0.3% to $1,764.91.
Inflation is also an issue elsewhere as UK consumer price inflation hit its peak in more than 10 years to 5.1% in November, beating all forecasts by economists ahead of Thursday's Bank of England rate-setting meeting.
Investors have sharply increased bets that the Bank of England is going to raise rates.
"Everyone is targeting the Fed, but the UK inflation data is an absolute disaster for the Bank of England - for all intents and purposes they should be raising rates, but the problem is Omicron and the uncertainty around that," said Michael Hewson, chief managing. market analyst at CMC Markets.
The European Central Bank will meet on Thursday and is expected to cut stimulus another notch, but is promising plentiful support for next year, sticking to its long-held view that alarmingly high inflation will fall on its own.
According to https://newexness.com/login/, oil prices fell after the International Energy Agency said the spread of a variant of the Omicron coronavirus would affect a recovery in global fuel demand.
But US oil prices rose 0.20 per cent to $70.87 a barrel and Brent crude rose 0.24 per cent to $73.88 a barrel.
Read with us: European markets rise, tracking global earnings optimism; UBS beats