Asian stocks edge higher as hawkish Fed, elevated yields and geopolitical cap upside
Meanwhile, Fed Chair Kevin Warsh’s focus on inflation helps calm the recent bond-market selloff and lift investors’ sentiment.
Shares edged higher in Asia today (17 September), tracking US stock futures, as traders digest the Federal Reserve's (Fed) hawkish tilt ahead of other key central bank events, reports FXSTREET.
The Bank of England (BoE) is scheduled to announce its policy decision later on Thursday, while the Bank of Japan (BoJ) is widely expected to raise borrowing costs at the end of a two-day meeting on Friday.
Meanwhile, the US Federal Reserve (Fed) voted unanimously to raise interest rates for the first time since 2023 at the conclusion of the September policy meeting on Wednesday. Moreover, the so-called dot plot revealed that Fed officials expect one more interest rate increase this year.
Keep updated, follow The Business Standard's Google news channel
Meanwhile, Fed Chair Kevin Warsh's focus on inflation helps calm the recent bond-market selloff and lift investors' sentiment.
Speaking at the post-meeting press conference, Warsh underscored the importance of stabilising consumer prices to grow the US economy, saying that inflation is too high and has been for too long.
However, oil-driven inflation risks keep the yield on the benchmark 10-year US government bond pinned near 5.0%, close to its highest level since 2007. This, along with Middle East tensions, caps the optimism.
In the latest developments, Iran-backed Houthi rebels said that Saudi aircraft have carried out more than 450 air strikes across Yemen in the past week. Meanwhile, US President Donald Trump claimed that Iran wants to strike a deal and that the war may be nearing its end.
Nevertheless, intensifying fighting between the Houthi group and Saudi Arabia keeps the geopolitical risk premium in play.
