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Asian markets are retreating as the Fed expects to hold up in the coming years



Tourists on a cruise on the Huangpu River pass by the Shanghai Tower. Shares in Shanghai fell on Thursday.

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Asian stock markets fell on Thursday after the U.S. Federal Reserve indicated that its benchmark interest rate will remain close to zero at least until 2023, but did not announce any additional stimulus plans.

The Shanghai SHCOMP Composite Index,
-0.98%
lost 1% and the Nikkei 225 NIK,
-0.64%
in Tokyo it sank 0.7%. The Hang Seng HSI,
-1.61%
in Hong Kong it fell 1.8%.

El Kospi 180721,
-1.24%
in Seoul lost 1.4%, while the S & P / ASX 200 XJO in Sydney,
-1.10%
decreased by 1.1%. Shares in New Zealand NZ50GR,
-0.16%,
Taiwan Y9999,
-0.85%,
Indonesia JAKIDX,
-0.21%
and Singapore ITS,
-0.14%
he also retired.

Wall Street’s S&P 500 benchmark closed 0.5% after the Fed said it would not raise interest rates until inflation reached 2%, which the US central bank’s own projections show that it does not wait until the end of 2023.

President Jerome Powell promised the Fed “that we will not lose sight of the millions of Americans who lose their jobs,” but gave no indication of a new stimulus.

Markets “expected the Fed to put policy money where the mouth is,” but “ended up a little disappointed,” Mizuho Bank said in a report. The Fed was “long to talk and short to action.”

Global markets have recovered most of this year’s losses, driven by central bank credit infusions in troubled economies and the hope of a coronavirus vaccine.

Meteorologists warn, however, that the recovery may be too large and rapid to rely on uncertain economic activity.

U.S. investors are counting on Congress to get a new support package after additional unemployment benefits that help support consumer spending expire, but lawmakers are locked in on its possible size.

The S&P 500 SPX,
-0.46%
decreased to 3,385.49. The Dow Jones Industrial Average DJIA,
+ 0.13%
increased 0.1% to 28,032.38. The Nasdaq Composite COMP,
-1.25%
it lost 1.3% to 11,050.47.

Powell said the U.S. economy has recovered faster than that

The Fed expects the economy to shrink by 3.7% this year, an improvement over its June outlook, which fell 6.5%. The Fed projected an unemployment rate at the end of the year of 7.6% instead of the 9.3% forecast in June.

“A full economic recovery is unlikely until people are confident that it is safe to re-engage in a wide variety of activities,” Powell said.

In energy markets, US crude oil for October delivery CLV20,
-1.49%
it lost 28 cents, to $ 39.88 a barrel, in e-commerce on the New York Stock Exchange. The contract rose $ 1.88 on Wednesday to $ 40.16. Brent crude oil for November delivery BRNX20,
-1.27%
threw 22 cents at $ 42 a barrel in London. It earned $ 1.69 the previous session at $ 42.22.

The USDJPY Dollar,
+ 0.12%
fell to 105.04 yen from Wednesday’s 105.01 yen.


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