Fed Inflation Pointer Lifts Wall Street

The release of the minutes saw the major indices change direction, turning positive after what had been a day spent mostly in the red.

Investors have been repeatedly spooked since February by the prospect that rising inflation could cause prompt the Fed to raise interest rates faster than expected this year.

But while the Fed signalled its second rate hike of the year will likely come early next month, it also said it could allow inflation to modestly overshoot its two percent target - so long as that increase was only "temporary".

Maris Ogg of Tower Bridge Advisors said the minutes gave markets a little bit of certainty about the path of monetary policy. "There is often a relief when this report is behind you. Most people recognise now that we will probably get three more rate hikes this year and probably you get uncertainty out of the way."

Meanwhile, General Electric had its worst day in nearly a decade, weighing heavily on the benchmark Dow, after CEO John Flannery reportedly forecast no growth in the company's power business and left investors with doubts about the current dividend.

Markets had sagged early in the day after President Donald Trump said he was dissatisfied with trade talks with China and cast doubt that a June summit with North Korea would go ahead. (AFP)