Stocks rallied the most since May 2020 and Treasury yields fell after Federal Reserve Chair Jerome Powell eased concern the central bank will embark on a more aggressive pace of tightening after delivering its steepest rate increase in two decades.Traders pared their bets on a bigger June hike after Powell said there was “a broad sense on the committee that additional 50 basis-point increases should be on the table for the next couple of meetings.” He also dashed speculation that the Fed was weighing an even larger hike of 75 basis points in the months ahead, saying that it is “not something that the committee is actively considering.” The dollar had its largest decline in two months.The Federal Open Market Committee voted unanimously to increase the benchmark rate by a half percentage point. It will begin allowing its holdings of Treasuries and mortgage-backed securities to decline in June at an initial combined monthly pace of $47.5 billion, stepping up over three months to $95 billion.
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