Fed dampens bets on more rate cuts

Asian shares stumble, dollar firms

Asian shares fell to six-week lows on Thursday while the dollar jumped to two-year highs as the U.S. Federal Reserve poured cold water on market expectations of a lengthy easing cycle following a 25 basis-point rate cut. MSCI’s broadest index of Asia-Pacific shares outside Japan faltered 0.6%, extending losses for a fifth day to the lowest since mid-June.

Japan’s Nikkei reversed early losses and were a shade higher, while Australian shares declined 0.2%. Losses in Chinese shares accelerated after it opened lower with the blue-chip index down 0.8%. E-minis for the S&P500 clawed back early losses and were marginally higher, after a sharp drop on Wall Street.

Global share markets recoiled overnight after U.S. Federal Reserve Chairman Jerome Powell said Wednesday’s easing was “not the beginning of a long series of rate cuts”.

https://www.reuters.com

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