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Stocks rallied slightly on Wednesday after minutes from the Federal Reserve’s most recent policy meeting showed that the central bank is likely to continue raising interest rates by a half-percentage point each in June and July, amid growing urgency to combat surging inflation and avoid an economic down turn


Stocks moved higher as investors assessed the minutes of the Fed’s policy meeting earlier in May: The Dow Jones Industrial Average rose 0.6%, around 200 points, while the S&P 500 gained 1% and the Nasdaq Composite 1.5%.

The latest minutes show that there is a consensus among Fed officials about the growing need for tighter monetary policy from the central bank, while interest rates could be increased more quickly than markets have currently priced in.

Most officials agreed that it would be necessary to continue the current pace of aggressive monetary policy and raise interest rates by 0.50% intervals at the upcoming meetings in June and July.

The Fed “should expeditiously move the stance of monetary policy toward a neutral posture,” but a “restrictive” stance on policy may well become appropriate, “depending on the evolving economic outlook and the risks,” according to the latest minutes.

While the central bank is monitoring the economic impact of surging inflation which led to slowing economic growth in the first quarter, officials expect GDP growth to rebound in the second quarter and “advance at a solid pace over the remainder of the year.”

Retail and consumer stocks, which have been hard-hit in the last couple of weeks after dismal earnings and profit warnings from several major companies, pared back some of their recent losses and led the market gains on Wednesday.