Asian Markets Surge after Fed Signals for Smaller Rate Hike in December

The Federal Reserve Chairman Jerome Powell on Wednesday sent a signal that smaller interest rate hikes are possible up ahead he sees progress in the combat against rising prices as largely inadequate.

The chairman said that the US central bank is in a good position to reduce the size of rate increases as soon as December.

Wall Street previously expected the Fed to reduce the size of its rate hikes to 50 basis points, its first reduction from four-consecutive 75bps hikes so far this year to curb rising inflation. Market consensus for terminal rate pointed to nearly 5%, while some expected the end of rate hike cycle to go beyond 5%.

The US Fed will hold its final meeting of the year on December 14, 2022.


Stocks market reacted positively on the Fed’s statement as Nikkei rose 1.12%, SSEC gained 0.99%, Hang Seng Index increased 1.58%, ASX200 inched 0.30% higher and Kospi hiked 0.85%.

Thailand’s SET Index opened at 1,641.90 points, increased 6.54 points or 0.40%.