Asian stocks sank in holiday-thinned trade Wednesday, tracking a sharp sell-off on Wall Street after fresh US data dealt another blow to hopes the Federal Reserve will cut interest rates this year.
Traders are keenly awaiting the Federal Reserve's policy decision and boss Jerome Powell's comments on the outlook. Photo: WIN MCNAMEE / GETTY IMAGES NORTH AMERICA/Getty Images via AFP
It also adds to the angst among investors leading up to the Fed's latest policy decision later in the day, which many were already expecting to see officials turn more hawkish. Wall Street's three main indexes tanked Tuesday after news that the employment cost index, the Fed's preferred gauge of wage inflation, came in hotter than forecast in the first quarter.That provided another hammer blow to hopes the Fed will cut rates this year, with bets already reduced to just one by January -- compared with an expected six at the start of 2024.
"If the Fed asserts a high probability of no cuts this year, or even the open possibility of another hike, that could deepen the sell-off in stocks."
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