GLOBAL MARKETS-Stocks gain, dollar drops after Fed holds on rates

* Fed sees higher growth, rates remain steady
* US 10-yr yield pares rise after Fed statement
* Dollar slides as Fed dampens early U.S. rate hike view
* Oil falls further on demand outlook, U.S. stock build

(Updates with close of U.S. markets)
By Lewis Krauskopf
NEW YORK, March 17 (Reuters) - A gauge of global stocks
gained on Wednesday and the U.S. dollar slid after the Federal
Reserve repeated its pledge to keep its target interest rate
near zero for years to come.
The yield on the benchmark U.S. Treasury note US10YT=RR ,
whose surge has roiled markets in recent weeks, fell back after
hitting its highest level since January 2020 ahead of the highly
anticipated statement from the central bank.
The Fed projected a rapid jump in U.S. economic growth and
inflation this year as the COVID-19 crisis winds down.
“In our view, the combination of still low yields, very slow
and gradual normalisation of policy, and the improving economic
outlook, remains a positive mix for risk assets," said
Willem Sels, chief investment officer, Private Banking and
Wealth Management at HSBC.
On Wall Street, major indexes moved higher, with the S&P 500
posting a record high close, after the Fed statement and news
conference.
Fed Chair Jerome Powell stressed the rosier outlook did not
mean the Fed would now remove its support for the economy, with
the nation still 9.5 million jobs short of where it was before
the emergence of COVID-19 and inflation below the Fed's target.
The Dow Jones Industrial Average .DJI rose 189.42 points,
or 0.58%, to 33,015.37, the S&P 500 .SPX gained 11.41 points,
or 0.29%, to 3,974.12 and the tech-heavy Nasdaq Composite
.IXIC added 53.64 points, or 0.4%, to 13,525.20.
“The Fed statement today was more optimistic than some
expected, they raised their outlook for both economic growth and
the labor market," said David Carter, chief investment officer
at Lenox Wealth Advisors in New York. "The market's view of the
statement is that it was fairly optimistic."
The pan-European STOXX 600 index .STOXX lost 0.45% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.24%, after falling earlier in the session.
The benchmark 10-year Treasury note US10YT=RR , last fell
4/32 in price to yield 1.6374%, from 1.623% late on Tuesday. It
touched 1.689%, its highest level since January 2020, during the
session. The U.S. dollar fell after the Fed said it does not expect
to raise interest rates through all of 2023, contrary to market
expectations.
In currencies trading, the dollar index =USD fell 0.518%,
with the euro EUR= up 0.66% to $1.1979.
"There's no indication that the Fed is preparing to act on
rising inflation or the stronger economy we've been seeing,"
said Kim Rupert, managing director of global fixed income
analysis at Action Economics in San Francisco.
The Russian rouble slid versus the dollar after U.S.
President Joe Biden said his Russian counterpart Vladimir Putin
will "pay a price" for efforts to meddle in the 2020 U.S.
presidential election. Oil slipped for a fourth day, weighed down by expectations
of weaker demand in Europe and by rising U.S. crude inventories.
Brent crude LCOc1 settled down 39 cents, or 0.6%, at $68 a
barrel while U.S. West Texas Intermediate (WTI) crude CLc1
dropped 20 cents, or 0.3%, to end at $64.60.

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INSTANT VIEW-FOMC: Accelerated growth seen, only slight change
in tightening outlook markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
Tolerated Inflation Hump? https://tmsnrt.rs/3qV72Xj
A steeper U.S. Treasury yield curve https://tmsnrt.rs/3tsINRP
World FX rates http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Additionl reporting by Stephen Culp in New York, Sujata
Rao-Coverley and Dhara Ranasinghe in London, Karen Pierog in
Chicago and Yoruk Bahceli in Amsterdam; Editing by Elaine
Hardcastle, Nick Zieminski and Philippa Fletcher)