Photo: Federal Reserve / Wikimedia Commons
Asian markets head into Thursday digesting a Federal Reserve decision that split its officials. The Fed held its benchmark interest rate at 3.75 to 4.00 percent on Wednesday in a 10-2 vote. Ten officials backed the hold; Lisa Cook and Beth Hammack voted against it, preferring to raise the target range by a quarter point. Wall Street took the day calmly. The S&P 500 rose 0.3 percent to 7,743.97, the Nasdaq Composite added 0.3 percent to 26,549.85, and the Dow Jones Industrial Average gained 0.2 percent to 52,475.10.
In its statement, the Fed said the economy is “expanding at a strong pace,” that inflation “remains elevated,” and promised to “deliver price stability.” Two votes for a rate increase are a clear signal that the next move is not guaranteed to be a cut.
Asia’s Wednesday session had already closed strong before the Fed news. Tokyo’s Nikkei 225 rose about 1.1 percent to 63,954.19. South Korea’s Kospi was the standout again, surging about 6.6 percent to 6,012.44, back above the 6,000 mark, as chipmakers extended their rally. Hong Kong’s Hang Seng Index edged up 0.2 percent to 23,094.83, and the Shanghai Composite added 0.9 percent to 3,681.47. Australia’s S&P/ASX 200 opened Thursday’s session up about 0.5 percent near 8,887.
Oil steadied after its recent slide, with U.S. crude near $102 a barrel late Wednesday. The dollar traded at about 157.7 yen. The Bank of Japan announces its own rate decision on Friday, and its read on the yen and inflation, with its rate at 1.25 percent, will close out the week for Asian markets.
Closer to home, coalition bargaining continued in Israel after Tuesday’s election ended without a clear winner.
For ordinary households, the takeaway from the statement is that the Fed held its benchmark rate at 3.75 to 4.00 percent, and the officials who set it said inflation “remains elevated” and promised to “deliver price stability.” The statement makes no prediction about what borrowing costs do next.
This week: Amazon’s results on Thursday, the Bank of Japan’s decision, Tokyo inflation and results from ExxonMobil and Chevron on Friday, and China’s monthly factory surveys on Saturday.
JBizNews Desk | New York
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