Asian Stocks Rise After Powell Hints at Interest Rate Cut
Asian stock markets opened higher, mirroring Wall Street's rally after Fed Chairman Jerome Powell signaled an interest rate cut. MSCI Asia rose 0.2%, Japan and Korea rose, while the Australian index hit a new record. In US bonds, Treasuries weakened at the open, sending the 2-year yield up 1 bps to 3.70%. The dollar index rose 0.1% after posting its third consecutive weekly decline.
Market participants now price in an 84% chance of the Fed cutting rates next month, following signals at Jackson Hole that easing could come even if inflation is not fully at target and the labor market is weakening. However, policymakers remain divided, with warnings about price risks from US trade tariffs ahead of this week's key inflation data release.
According to Hebe Chen (Vantage Markets), Powell's "wish come true" signal is supporting risk appetite and could keep sentiment buoyant until the Fed meeting on September 17. With that in mind, the Asian rally has the potential to continue as long as the data doesn't disappoint and the policy message remains consistent.
China is in the spotlight. On the one hand, the steady rally reduces the risk of a sudden correction; on the other, tariffs and the property crisis are weighing on the outlook, leading some analysts to suspect a potential bubble. China's Nasdaq Golden Dragon rose 2.7% on Friday, and futures signal a stronger opening for Hong Kong and mainland markets.
In the US, sentiment was initially weak—the S&P 500 fell for five straight days—before surging to its best level since May following Powell's comments. In what was likely his final speech at Jackson Hole as chairman, Powell emphasized that economic signals remain "cloudy": the impact of tariffs on prices is starting to show, but it's not certain to trigger persistent inflation; while the labor market is "curious," with both labor demand and supply declining. (ayu)
Source: Newsmaker.id
