Asian and European markets rallied Thursday as traders welcomed blockbuster earnings from Wall Street titans and after the Federal Reserve painted a rosy picture of the US economic outlook, repeating a pledge to stick to its guns with an ultra-low monetary policy. Traders were also keeping an eye on President Joe Biden’s first address to Congress as he laid out another huge spending plan aimed at helping American families and paid for with taxes on the wealthy. After a shaky couple of weeks on trading floors, equities appear to be finding their feet again and getting ready to push to new highs as vaccines are rolled out, lockdowns eased and economies get back on track. And while there have been fears the expected surge in activity in this year could fan inflation and force central banks to step back from their loose monetary policies, the Fed said Wednesday it was ready to stay the course. After its latest meeting the bank upgraded its outlook for the world’s top economy, while its boss Jerome Powell said that the expected spike in inflation will be temporary owing to last year’s low base of comparison and is not likely to need policy action. “An episode of one-time price increases as the economy reopens is not the same thing as, and is not likely to lead to, persistently higher year-over-year inflation,” he said in response to a question from AFP. He also said it was not yet time to start talking about tapering its vast bond-buying programme that has pumped trillions into the financial system. “The Fed’s outcome-based guidance and triple-down bet on not talking about tapering should provide an easy playbook leading up to the June 16th (policy) meeting,” said OANDA’s Edward Moya. “The US will need to see a couple of blowout nonfarm payroll reports, herd immunity reached before the June meeting, and inflation above 3.5 percent for the Fed to be willing to start talking about tapering.” And markets strategist Louis Navellier added: “One observation about why the Fed is maintaining such a high level of conviction that inflation will not be long lasting is that the global reopening is not a synchronous economic event. “China, the US, and parts of Europe are experiencing late-stage pandemic growth, but this is not happening in several key developing and emerging markets, where Covid-19 data is surging, and their economies are still suffering.” ‘Ready for takeoff’ However, Michael Hewson at CMC Markets said: “To sum up, the Fed appears to be on autopilot through the summer, however if the data continues to surprise to the upside the market will probably front run it anyway.” While US markets struggled to lift off, with all three main indexes ending down, Asia was well in the green, with Hong Kong, Sydney and Singapore leading the way. Shanghai, Wellington and Jakarta were also up, though Seoul dipped and Taipei was flat. Tokyo was closed for a holiday.