Hello, Finance Buddies! The Asian markets experienced mixed reactions last Wednesday following new records on Wall Street and remarks by the Fed Chair hinting at potential interest rate cuts later this year, though no clear timeline was provided. Curious about the Fed Chair’s comments and their impact on Asian stocks? Let’s dive in!
Fed Chair’s Remarks on Tuesday
According to The Jakarta Post, in his testimony before the Senate Banking Committee on Tuesday, Fed Chair Jerome Powell reiterated that inflation has notably eased over the past two years, though it remains above the central bank’s 2% target. Powell cautioned that the Fed risks weakening the economy and job market if it cuts interest rates too late or too little.
The Fed has maintained a cautious stance, holding its benchmark interest rate at its highest level in over two decades as it awaits further signs of cooling inflation. While prices have eased significantly as the Fed raised rates, the central bank aims to return inflation to its 2% target without excessively slowing economic growth. Current inflation hovers around 3%, continuing to pressure consumers, particularly those with lower incomes.
Asian Markets’ Mixed Reactions
Following Powell’s remarks, Asian stocks showed mixed reactions. Here’s a breakdown of the key movements according to AP News:
- Tokyo’s Nikkei 225: Touched a fresh intraday high but fell back, edging 0.1% lower to 41,536.10 by midday.
- Hong Kong’s Hang Seng: Gained 0.4% to 17,587.16.
- Shanghai Composite: Dropped 0.3% to 2,949.60. China reported that its consumer price index slipped to 0.2% in June from 0.3% in May, below expectations, largely due to declines in prices for foods other than pork.
- Seoul’s Kospi: Fell 0.2% to 2,862.89.
- Taiwan’s Taiex and India’s Sensex: Both were up 0.2%.
On Tuesday, the S&P 500 and Nasdaq composite each rose 0.1%, setting all-time highs for the second time this week. The S&P 500 rose 4.13 points to 5,576.98, the Nasdaq added 25.55 points to close at 18,429.29, while the Dow fell 0.1% to 39,291.97. Stocks have been steadily gaining ground over the past several months, pushing the S&P 500 to 36 records this year.
So, Finance Buddies, that’s the latest on how Asian stocks reacted to the Fed Chair’s remarks on potential rate cuts. Do you want to keep getting the latest updates in the financial world like this? Keep an eye on the Invlinic blog! There will be more information about financial planning, investment, trading, and the latest updates in the financial world.
