The Dow Jones Industrial Average blew past its all-time record close Wednesday, surpassing 37,000, within hours of the Federal Reserve’s decision to keep interest rates steady — and a forecast by the central bankers to possibly cut rates three times next year.

Fed chair Jerome Powell said the historic tightening of monetary policy is likely over, with a discussion of cuts in borrowing costs coming “into view.”

Powell’s remark, made in a press conference following the end of the central bank’s final policy meeting of the year, dovetailed with projections from all 19 policymakers that showed near unanimity that borrowing costs would fall in 2024, many of them by a substantial margin.

“You see that people are not writing down rate hikes: that’s us thinking that we have done enough,” Powell said.

While Fed policymakers did not want to take another rate hike off the table, it is no longer the central bank’s “base case,” he said.

The timing of rate cuts “is really the next question: that’s what people are thinking about, and talking about,” he said, with a “general expectation” that a future meetings would feature such a discussion. The next two-day meeting begins Jan. 31.

Though it is too early to declare that the Fed has achieved its stated goal of a “soft landing,” Powell said, “the question of when will it become appropriate to begin dialing back the amount of policy restraint: that begins to come into view.”

The Fed’s actions and Powell’s comments sparked a rally on Wall Street. The Dow, which was flat before the 2 p.m. announcement, jumped 512 points to close at 37,090, topping its previous all-time high of 36,952 set in January 2022 — two months before the Fed began its historic tightening.

Wednesday’s decision meant the Fed has now held its benchmark federal-funds rate steady at three consecutive policy meetings. The central bankers began hiking rates from near zero in March 2022 and last raised them in July to the current range, which is a 22-year high.

Powell hedged that he couldn’t definitively rule out higher rates at this point, even as officials looked toward a lower policy rate.

“While we believe our policy rate is at or near its peak for the tightening cycle, the economy has surprised forecasters,” Powell said.

Because of the unpredictable nature of the economy, he said that while Fed officials “do not view it as likely to be appropriate to raise interest rates further, neither do they want to take the possibility off the table” if it’s needed.

The newest projections showed policymakers see the risks to inflation and employment — the two planks of the Fed’s dual mandate — were coming into better balance.

On Tuesday, the Consumer Price Index — which tracks changes in the costs of everyday goods and services — showed inflation rose 3.1% in November.

Though it’s a tick lower than October’s 3.2% reading, it nevertheless remains well above the Fed’s 2% inflation target — a rate Powell said on Wednesday likely won’t be achieved until 2026.

Powell reflected on the economy throughout the year, noting a slowdown in economic activity, “moderated” US payroll gains — despite employers adding a surprisingly-strong 199,000 jobs last month — as well as low unemployment and easing inflation.

Similar to minutes of the Oct. 31 to Nov. 1 session — when the Fed ended up holding the benchmark overnight interest rate steady in the current 5.25% to 5.5% range — Powell said central bankers were taking a more cautious approach moving forward.

Attention now turned to how soon the Fed would implement its first rate cut.

Chief Financial Analyst at Bankrate, Greg McBride, said that “nothing in the economy suggests the Fed needs to be in a hurry to cut interest rates in 2024.”

“In a soft-landing scenario, the Fed only needs to trim rates in response to further easing in inflation pressures, just enough to maintain tight policy without loosening it,” McBride added.

The hope of forthcoming rate cuts is likely welcome news for economists and prominent Wall Street executives‘ worries that without such a move, the economy could be headed for a so-called “hard landing” — where interest rates are taken so high that it spurs a recession.

JPMorgan chief Jamie Dimon sounded the alarm on a possible economic downturn just two weeks ago, warning Wall Street to prepare for the threat of rising interest rates even as inflation slows.

“A lot of things out there are dangerous and inflationary. Be prepared,” Dimon said at the New York Times DealBook Summit in New York.

“Interest rates may go up and that might lead to recession,” he added.