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Asian markets are following Wall St higher on the Fed’s promise of interest rates

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BEIJING (AP) – Asian stocks rose on Wall Street on Thursday after the US Federal Reserve announced that its key interest rate would remain near zero until 2023.

In Shanghai, Tokyo and Hong Kong, the benchmarks have improved. Sydney retreated.

The Fed’s promise to keep rates at a low level came at a time when it was forecasting economic growth of 6.5% this year, the strongest since the 1980s, with inflation rising to 2% for the first time in years.

On the Wall Street, the S&P 500 rose 0.3% to a new high.

Fed Chairman ome Jerome Powell’s comments at a news conference seem to have reassured investors who are worried that high inflation could push central banks to raise interest rates as economic growth weighed on them.

“The market response suggests that investors are now happy with the Fed’s explanation,” said Tai Hui in a report by JP Morgan Asset Management. “Inflation is expected to rise in the coming months. It may be necessary for the Fed to provide more market restraints at this price point.”

The Shanghai Composite Index rose 0.6% to 3465.85 and the Tokyo Nikkei 225 rose 0.9% to 30192.11. Hang Seng in Hong Kong increased 1.5% to 29,474.61.

The Seoul Cospin was up 0.7% at 3,068.01, while the Sydney S & P-ASX 200 was down 0.7% at 6,745.90.

India’s Sensex rose 0.5% to 50,043.87. New ելland ելland also declined as Southeast Asian markets flourished.

Investors were worried that inflation could accelerate after governments flooded flooded economies with extra spending and loans to reverse the biggest global downturn since the 1930s.

Central banks have traditionally responded to higher price pressures by raising interest rates. But Fed officials say they will allow the US economy to “heat up” to make sure the recovery is of great interest.

Ahead of his comments on Wednesday, the yield on the 10-year US Treasury Bond, or the gap between its market repayment period and maturity, widened to 1.68%, the highest level since January 2020.

According to Powell, the yield fell and the shares fell.

The S&P 500 rose 3,974.12 points, recovering from a 0.7% slide. The Dow Jones industrial average was up 0.6% at 33,015.37. The Nasdaq was up 0.4% at 13,525.20.

Banks, industrial stocks, and companies that rely on consumer spending helped boost the market. These gains outweighed the profitability of healthcare, utilities, and other areas.

Investors are making big bets that the economic downturn will subside when spring comes, and more Americans will be vaccinated against the coronavirus. Checks over $ 1,400 that the Biden administration sent to individuals over the weekend also help. But faster economic activity can also lead to some inflation.

Federal policymakers predict that unemployment will rise from 6.2% at the end of the year to 4.5% and by the end of 2022 to 3.9%.

This indicates that the central bank will be close to meeting its targets by 2023, when it expects inflation to exceed its 2% target and unemployment to reach 3.5%. However, interest rates are not expected to rise at that time.

US crude lost 36 cents to $ 64.24 a barrel on the New York Mercantile Exchange. The contract fell 20 cents to $ 64.60 on Wednesday. Brent crude for May delivery fell 41 cents to $ 67.59 a barrel in London. In the previous session, it rejected 39 cents, amounting to 68 dollars.

The dollar exchange rate rose to 108.90 yen from 108.86 yen on Wednesday. The euro fell by $ 1.1967 from $ 1.1979.

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