HONG KONG, Sept 18 \u2014 Equities wavered in Asia today after the Federal Reserve lowered interest rates but left investors wondering how many more cuts were in the pipeline despite boss Jerome Powell warning about the struggling jobs market.<\/p>\n
After months of speculation fuelled by a string of weak labour statistics, the US central bank said it would lower borrowing costs 25 basis points, its first reduction since December.<\/p>\n
The 11-1 decision to cut \u2014 US President Donald Trump\u2019s appointee Stephen Miran voted for a 50-point cut \u2014 came even as inflation continues to run well above policymakers\u2019 two per cent target, but analysts said the main focus was on jobs.<\/p>\n
In its post-meeting statement, the Fed said \u201cdownside risks to employment have risen\u201d and inflation has picked up and \u201cremains somewhat elevated\u201d.<\/p>\n
Powell said in a news conference that the passthrough of tariffs to consumers had been slower and smaller than expected.<\/p>\n
\u201cLabour demand has softened, and the recent pace of job creation appears to be running below the break-even rate needed to hold the unemployment rate constant,\u201d he told reporters.<\/p>\n
The bank\u2019s closely watched forecast for future rates showed some division on the path forward, with a narrow majority of the 19 officials assessing the outlook eyeing two more cuts but seven projecting none.<\/p>\n
And Powell remained cagey, saying decision-makers were approaching it \u201cmeeting by meeting\u201d.<\/p>\n
Michael Pearce of Oxford Economics said the figures showed a \u201cstark divide\u201d that was \u201cunusual\u201d and that the October move could depend on jobs figures.<\/p>\n
US markets ended on a tepid note, with the Dow up but S&P 500 and Nasdaq down.<\/p>\n
Asian investors were also cautious.<\/p>\n
Tokyo rose as the Fed decision boosted the dollar against the yen and other currencies, helping Japanese exporters, while Hong Kong and Shanghai swung in and out of positivity.<\/p>\n
Seoul, Taipei and Jakarta rose, while there were losses in Sydney, Singapore, Wellington and Manila.<\/p>\n
\u201cThe selloff in rates markets after the presser suggests that investors were looking for Powell to lean more decisively toward the employment mandate,\u201d said economists at Bank of America.<\/p>\n
\u201cWe stick with our view that the Fed will cut only once more this year, in December.<\/p>\n
\u201cHowever, after Powell\u2019s comment that (the) rate cut \u2018isn\u2019t just one action\u2019, the risk has risen that the second cut will be pulled forward to October (with potentially a third cut in December).\u201d<\/p>\n
Jack McIntyre at Brandywine Global, part of Franklin Templeton, said the Fed is \u201cputting more emphasis on the softening in the labour market\u201d.<\/p>\n
\u201cIt makes sense that more rate cuts are expected as monetary policy works with a lag and labour market statistics are a lagging economic indicator.<\/p>\n
\u201cThe weakening labour market will have a deleterious impact on inflation, so the Fed is willing to wait out sticky inflation.\u201d<\/p>\n
The split in the Fed outlook \u201cprobably means more volatility in financial markets next year\u201d, he added.<\/p>\n
Gold prices held losses around US$3,660 (RM15,353), having spiked yesterday at a record above US$3,707.<\/p>\n
In company news, Australian energy group Santos plunged nearly 12 per cent in Sydney, after a consortium led by the state-owned Abu Dhabi National Oil Company said Wednesday it had retracted a takeover bid. \u2014 AFP<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"HONG KONG, Sept 18 \u2014 Equities wavered in Asia today after the Federal Reserve lowered interest rates but…\n","protected":false},"author":2,"featured_media":29476,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[24017,72,113,1961,240,61,5232,60,3162,24016],"class_list":["post-29475","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-asian-equities","tag-business","tag-economy","tag-federal-reserve","tag-hong-kong","tag-ie","tag-interest-rates","tag-ireland","tag-jerome-powell","tag-us-jobs-market"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/29475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=29475"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/29475\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/29476"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=29475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=29475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=29475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}