Asia markets rise as Fed’s Powell signals rate cuts are on the horizon

Asia-Pacific markets rose after comments from U.S. Federal Reserve Chair Jerome Powell hinted that interest rate cuts may not be too distant if inflation signals support policy easing. Speaking to the Senate Banking Committee, Powell didn’t offer an exact timeline for rate cuts, but noted they would go down soon. “We’re waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we’re not far from it, it’ll be appropriate to begin to dial back the level of restriction,” Powell said in response to a question about rates and inflation. In Australia, the S&P/ASX 200 recorded a third straight day of gains, up 1.07%, to hit a record high of 7,847. Japan’s Nikkei 225 traded 0.23% higher to close at 39,688.94, while the Topix rose 0.3% to 2,726.8 as January household spending fell more than expected, dropping 6.3% year on year compared with the 4.3% expected by economists polled by Reuters. The metric gives a clue to whether inflation is outpacing wage gains, which is being closely watched by the Bank of Japan. South Korea’s Kospi climbed 1.24% to end at 2,680.35, while the small-cap Kosdaq was up 1.14% at 873.18. Hong Kong’s Hang Seng index rose 1.13%, while China’s CSI 300 closed 0.43% higher at 3,544.91. Overnight in the U.S., both the S&P 500 and Nasdaq Composite surged to record highs, as hopes over easing inflation and gains in tech aided Wall Street’s midweek bounce. The broad S&P 500 advanced 1.03% to 5,157.36, while the tech-heavy Nasdaq Composite climbed 1.51% to 16,273.38. Both notched all-time highs during the session, while the S&P 500 also clinched a closing record. Separately, the Dow Jones Industrial Average gained 0.34%.