Desk Report
Publish: 25 Nov 2021, 07:47 pm
Photo: Collected
Equity markets in Asia mostly fell Thursday as
a batch of strong economic data spurred expectations that the Federal Reserve
will withdraw its vast financial support and lift interest rates earlier than
thought.
A drop in jobless claims to a five-decade low,
along with a surge in consumer income and spending, reinforced optimism that
the world's biggest economy is well on the recovery track but added to pressure
on the central bank to prevent it from overheating.
The readings came as minutes from the Fed's
November policy meeting showed officials were moving towards tapering their
vast bond-buying programme --known as quantitative easing -- at a faster pace
as they try to tame rocketing prices.
While officials agreed to lower the amount of
bonds it bought each month from the start of November, the minutes said that
"some participants preferred a somewhat faster pace of reductions that
would result in an earlier conclusion to net purchases".
They added that the policy board would be
prepared to "raise the target range for the federal funds rate sooner than
participants currently anticipated if inflation continued to run higher than
levels consistent with the Committee's objectives".
Meanwhile, San Francisco Fed President Mary
Daly -- usually seen as a policy dove -- is also coming around to the idea of a
speedier withdrawal of stimulus. She also said she was "leaning towards"
a lift in borrowing costs, adding it "wouldn't surprise me at all if it's
one or two by the latter part of next year".
The surge in inflation around the world has led
several central banks to tighten the policies put in place at the start of the
pandemic and which have been a key driver of the global recovery and market
rally to record or multi- year highs over the past year and a half.
The S&P 500 and Nasdaq closed Wednesday with
healthy gains ahead of the Thanksgiving break.
But the Dow edged slightly lower, and Asia
largely followed suit.
Hong Kong, Shanghai, Sydney, Singapore and
Manila were all in the red. Seoul was also weighed by the South Korean central
bank's decision to lift interest rates for a second time.
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Topic : Equity markets Asia
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