Asian equities mixed ahead of US inflation reading
Federal Reserve Chair Jerome Powell signaled patience before cutting interest rates further and as investors look ahead to the upcoming CPI data.
Treasuries fell across the curve on Tuesday, with money markets still fully pricing in one rate cut by the Fed this year. Australia’s 10-year yield rose six basis points in early trading. Asian equities were mixed with Japanese stocks gaining while shares in Australia were steady ahead of Wednesday’s US inflation reading. Stock index futures pointed to gains for Hong Kong stocks.
The Fed doesn’t need to rush to adjust interest rates, Powell told Congress, largely echoing remarks in January, after the key policy rate was left unchanged following cuts at each of the last three meetings in 2024. Officials have signaled they are likely to hold rates steady until they see more progress on lowering inflation, and as they await further details on President Donald Trump’s economic-policy plans.
“If traders were looking for clues or intent about when another rate cut may occur, these were noticeably absent – by design,” wrote Tim Waterer, chief market analyst at KCM Trade in a note. With tariff outlook still looking clouded, “it’s easy to see why Powell didn’t fancy boxing himself in regarding the path of Fed policy in 2025.”
Key Inflation
As traders await a key US inflation reading later today, prices have showed scant signs of downward momentum at the start of the year. Healthy job growth has also buoyed the economy, backing the Fed’s stance to hold the line on interest rates
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