Asian stocks rose along with US equity futures on speculation that the Federal Reserve’s half-percentage-point interest-rate cut will guide the world’s largest economy toward a so-called soft landing.
Japan’s markets led gains in Asia, with an MSCI gauge of regional equities climbing by the most in a week. US stock futures also rallied after the S&P 500 Index closed 0.3% lower in the aftermath of the Fed’s announcement Wednesday.
Treasuries fell on bets the aggressive move to start the cutting cycle will mean the Fed will need to lower interest rates less in the long-run. Chair Jerome Powell himself cautioned against assuming big cuts would continue and signaled borrowing costs may need to remain higher than pre-pandemic norms.
The Fed’s move is reinforcing expectations that the US economy will avoid a downturn, and cemented wagers that policy makers won’t be in a rush to deliver further easing — a stance that’s likely to underpin the dollar in the coming days.
