Asian equities edged lower today as the Federal Reserve signaled fewer interest rate cuts than previously expected in 2024. Major indexes in Hong Kong, Japan, and South Korea posted declines, reflecting investor caution following the Fed’s hawkish tone. The Hang Seng Index dropped 1.2%, while the Nikkei 225 shed 0.8%, reversing earlier gains.
The Fed’s revised projections suggest a slower pace of monetary easing, casting a shadow over market optimism. With U.S. Treasury yields inching higher, Asian markets reacted negatively as concerns over tighter financial conditions overshadowed regional economic data. Traders now await upcoming U.S. economic indicators, which could further shape expectations on interest rate policy.
The retreat highlights the growing sensitivity of Asian markets to U.S. monetary policy signals, as fears of prolonged high rates dampen appetite for riskier assets. Analysts caution that persistent uncertainty may weigh on regional stocks heading into the new year.
