After the Fed’s interest rate cut, traders struggled to keep up with another Wall Street record while also weighing the future of another Trump administration, leading to a sharp decline in Asia’s markets ‘ rally on Friday ( Nov 8 ) as they weighed the outlook with another Trump administration.
Trading partners were also anticipating the conclusion of a week-long gathering of important Chinese officials, who had been formulating a significant stimulus package for the nation’s number two economy with an eye on the outcome of the US election.
Investors are optimistic that Donald Trump’s plans to slash taxes and pass more restructuring may improve the bottom lines of businesses despite the problems that Beijing and Washington may grow in the next four years.
There are problems that the Republican’s policies could fuel prices again, dealing a blow to the Fed’s long-running war against costs.
Jerome Powell, the head of the central bank, added to the cheerful mood on Thursday by stating that the results of this week’s vote would not have an impact on policymakers ‘ decision-making and that they would make their decisions based on data.
After the policy board cut rates 25 basis points to 4.50 to 4.75 per cent, as expected following September’s 50-point reduction, Powell said:” We do n’t guess, we do n’t speculate, and we do n’t assume”.
In its post-meeting statement, the Fed stated that “labour market conditions have typically eased” since earlier this year and that progress has been made in lowering inflation below its target of two percent.
Investors are now attempting to predict the results of a new split in December.
Robert Tipp and Tom Porcelli at PGIM Fixed Income said,” With Powell firmly focused on labor, the combination of an inflation rate now within the Fed’s goal means it can easily support further breaks.”
” Although doubt abounds, the Fed’s year-end 2025 estimates for a Fed funds rate of 3.5 per cent is still a useful starting place for where this cycle is going”.
On Wall Street, the S&, P 500 and Nasdaq rallied again to reach new information, helped by powerful performances by software titan Apple, Google family Alphabet and Facebook’s Meta.
Early in the afternoon, some businesses ceased to exist in Asia.
Tokyo, Sydney, Singapore, Wellington, Taipei and Jakarta rose.
But Hong Kong and Shanghai turned bad along with Seoul, Manila, Mumbai and Bangkok.
On money markets, the buck fell against the renminbi, extending Thursday’s losses in response to the Fed split, while cryptocurrency hit another all-time top of more than 76, 956 on hopes of more help from a crypto-friendly Trump White House.