It’s in Hong Kong, and the AFP says that. Asian stocks fell on Thursday after minutes from the Federal Reserve’s most recent policy meeting showed that the central bank is planning to cut its monetary policy very quickly. Oil prices rose after another big drop.
Finally, the long-awaited summary came back with bad news for traders. They’re worried that officials won’t be able to keep inflation down at 40-year-high levels and keep the world’s top economy from going into recession at the same time.
There were some policymakers who said they would like to raise interest rates by half a percent. They also talked about selling off their bond holdings at a rate of $95 million per month, which is called quantitative tightening.
There is about $9 trillion in the Fed’s bank account.
News that such measures are being thought about comes after several members of the policy board said that raising rates was a good idea. The next meeting is May 3-4.
Borrowing costs could rise more quickly and reach a higher level in the next few months because of the war in Ukraine. This has added to the wave of uncertainty that has spread across trading floors because of the war.
It’s also possible for things to get bad for a while.
“The job of making sure the economy has a soft landing is going to be hard,” said Tracie McMillion, who works at the Wells Fargo Investment Institute.
“We’ve only seen quantitative tightening once before, but it was a lot less than this time, and it was over quickly.”
For the second day in a row, Wall Street went down. The Nasdaq lost more than 2% again because tech companies are more vulnerable to higher interest rates, which hurt them more than other companies.
Asia, too, went down, with Tokyo, Sydney, Seoul, Taipei, Singapore, Wellington, and Manila all in the red.
Hong Kong and Shanghai moved up and down on hopes that China will ease monetary policy as its huge economy struggles under the weight of lockdowns in different parts of the country.
Authorities will use tools at the right time, according to a report from a meeting of the State Council, which was chaired by Premier Li Keqiang. They will also look into other ways to get people to use more.
On the oil market, both main contracts rose a good deal after dropping more than 5% the previous day because of fears about demand in the wake of a possible economic slowdown.
In addition, news from the International Energy Agency that it will let out tens of million barrels to make up for what Russia lost in sanctions because it invaded Ukraine was bad for the commodity.
Omicron is spreading much faster in China than other virus strains, and the government, not ready to change its strategy, is still trying to keep outbreaks under control by putting in strict rules.
Then, oil traders keep lowering the amount of oil they think will be used on the mainland.
