Hang Seng Index, ASX200, Nikkei 225: The Markets Respond to the Fed

Market Snapshot

The morning session was upbeat as the Asian equities markets reacted to the Fed's overnight interest rate rise and Powell's news conference. The Fed increased interest rates by 25 basis points to 4.75%, as anticipated. The action put Fed Chair Powell in charge of market risk sentiment, bolstering the Hang Seng Index's positive opening.

Support came from a favorable view of the economy, the state of the job market, and the prognosis for monetary policy. While conceding that the disinflationary process has begun, Fed Chair Powell said the Fed might deliver a couple more rate rises to return inflation to its objective.

The Fed Chair said that there wouldn't need to be "a major downturn, or a very large rise in unemployment" for the Fed Funds Rate to remain below 5% and achieve the inflation objective.

Despite Fed Chair Powell's upbeat prognosis, the US ADP nonfarm job change and ISM Manufacturing PMI statistics underperformed, casting doubt on the economy's prospects.