Financial Markets React to Fed Chair’s Rate Cut Comments
Asian markets were mixed on Tuesday, following Federal Reserve Chair Jerome Powell’s remarks that the recent aggressive rate cuts should not be seen as a sign of future rapid easing. Powell emphasized that the committee is not in a hurry to cut rates quickly, suggesting two more rate cuts this year, totaling 50 basis points, if the economy performs as expected.
In Japan, the Bank of Japan’s third-quarter Tankan survey revealed business optimism among large manufacturers remained steady at +13, while sentiment among non-manufacturers improved to +34. The country’s unemployment rate also eased to 2.5% in August, beating expectations.
Some Asian markets, including South Korea, Hong Kong, and mainland China, were closed for a public holiday on Tuesday. Japan’s Nikkei 225 rebounded 1.07% after a sharp decline on Monday, while Australia’s S&P/ASX 200 retreated 0.47% from an all-time high.
In the US, the S&P 500 reached a record close on Monday, concluding a winning month and quarter, with a 0.42% gain to 5,762.48. The Dow Jones Industrial Average also closed at a new record, while the Nasdaq Composite advanced 0.38%.
Investors will continue to monitor the impact of Powell’s comments on interest rates and the global economy, as well as key economic indicators from Asia and the US.
Leave a Reply