Home ›› 02 Dec 2022 ›› Stock
Asian stocks extended a global rally Thursday and the dollar sank after Federal Reserve boss Jerome Powell flagged a rate hike slowdown and China signalled a softer approach to fighting Covid.
A growing sense of hope that months of sharp monetary tightening around the world is finally reining inflation back from its decades-long highs sent equities surging in November, even as policymakers warned more work had to be done.
And in a much-anticipated speech Wednesday, Powell said the full effects of the Fed’s belt-tightening had yet to be felt but that it “makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down”.
He signalled the US central bank’s December gathering would likely see officials lift borrowing costs by 50 basis points, having pushed them up by a bumper 75 points at the past four meetings.
However, Powell did say policy would need to remain tight “for some time” to restore price stability, echoing comments from other Fed officials who suggested there might not be any cuts until 2024.
Analysts said the reaction to Powell’s remarks -- which had been expected to be his most dovish in some time -- highlighted a sense of relief among investors that a long-hoped-for pivot was on the cards.
All three main indexes on Wall Street surged, with the Nasdaq leading the way as rate-sensitive tech firms rocketed.
