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Asian markets retreat as the Fed expects to stand still for the next few years

Tourists on a cruise on the Huangpu River pass by the Shanghai Tower. Shares in Shanghai fell Thursday.

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Asian equity markets declined on Thursday after the US Federal Reserve indicated its benchmark interest rate will remain close to zero until at least 2023, but did not announce any additional stimulus plans.

The Shanghai composite index

lost 1% and the Nikkei 225

in Tokyo it fell by 0.7%. The Hang Seng

in Hong Kong it fell by 1.8%.

The Kospi

in Seoul it lost 1.4% while the S & P / ASX 200 in Sydney

decreased by 1.1%. Equities in New Zealand

and Singapore

he withdrew as well.

Wall Street’s benchmark S&P 500 index closed 0.5% lower after the Fed said it will not raise interest rates until inflation reaches 2%, which the bank’s projections US power plant show that it does not wait until the end of 2023.

President Jerome Powell promised the Fed “we will not lose sight of the millions of Americans who remain unemployed” but did not give indications of new stimuli.

Markets “were hoping the Fed would put monetary policies where the mouth is,” but “they were a little disappointed,” Mizuho Bank said in a report. The Fed has been “long in conversation and short on action”.

Global markets have recouped most of this year’s losses, driven by central bank credit infusions into troubled economies and hopes for a coronavirus vaccine.

Meteorologists warn, however, that the recovery may be too broad and rapid to be supported by uncertain economic activity.

US investors are counting on Congress for a new support package following the expiration of additional unemployment benefits that help support consumer spending, but lawmakers are stuck on its possible size.

The S&P 500

it fell to 3,385.49. The industry average of the Dow Jones
+ 0.13%

increased by 0.1%, to 28,032.38. The Nasdaq composite

it lost 1.3% to 11,050.47.

Powell said the US economy recovered faster than

The Fed expects the economy to shrink 3.7% this year, an improvement from June’s forecast of a 6.5% decline. The Fed predicted an unemployment rate at the end of the year of 7.6% instead of the 9.3% forecast in June.

“A full economic recovery is unlikely until people are confident it is safe to bounce back in a wide variety of businesses,” Powell said.

In energy markets, US crude oil benchmark for October delivery

it lost 28 cents to $ 39.88 a barrel in e-commerce on the New York Mercantile Exchange. The contract rose $ 1.88 on Wednesday to $ 40.16. Brent crude for delivery in November

lost 22 cents to $ 42 a barrel in London. It earned $ 1.69 in the previous session at $ 42.22.

The dollar
+ 0.08%

it fell to 105.04 yen from 105.01 yen on Wednesday.

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