(Adds U.S. market open, byline, dateline; previous LONDON)
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Reuters Live Markets blog: LIVE/
By Herbert Lash
NEW YORK, Aug 27 (Reuters) - A gauge of world equity markets
climbed while the dollar and gold prices eased on Thursday after
the Federal Reserve said it would roll out an aggressive new
strategy that aims to boost employment and allow inflation to
run faster than in the past.
Yields also rose on longer-dated government bonds as Fed
Chair Jerome Powell laid out a policy that will seek to achieve
inflation averaging 2% over time and offset below -2% periods
with higher inflation "for some time." The Fed also aims to ensure employment doesn't fall short of
its maximum level, a new approach Powell said reflected an
appreciation "that a robust job market can be sustained without
causing an unwelcome increase in inflation."
The dollar index =USD rose 0.27%, spot gold prices XAU=
fell 0.6% to $1,941.67 an ounce and advancing shares outnumbered
declining stocks on Wall Street.
"The dollar is going to be the punching bag again," said Ed
Moya, senior market analyst at OANDA in New York. Powell's
remarks "confirmed the market's expectations that this extreme
level of accommodation is not going away any time soon, and
risky assets are liking that."
MSCI's benchmark for global equity markets .MIWD00000PUS
rose 0.19% to 585.13, while Europe's broad FTSEurofirst 300
index .FTEU3 dropped 0.04% to 1,445.92.
On Wall Street, the Dow Jones Industrial Average .DJI rose
0.9%, the S&P 500 .SPX gained 0.47% and the Nasdaq Composite
.IXIC added 0.17%.
"The market will probably take some time to digest the
implications," said Nancy Davis, chief investment officer at
Quadratic Capital Management LLC in Greenwich, Connecticut.
"But I believe that a higher willingness to let inflation
run above 2% should hurt long-end bonds and inflation
expectations probably should increase," she said.
The 10-year U.S. Treasury US10YT=RR note rose 2.3 basis
points to 0.7096%.
The euro EUR= was last down 0.28% at $1.1796.
Brent crude futures LCOc1 fell $0.59 to $45.05 a barrel.
U.S. crude futures CLc1 slid $0.50 to $42.89 a barrel.
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