BANGKOK (AP) — Asian shares were mostly higher Thursday following an advance on Wall Street after the Federal Reserve said the economy still looks healthy enough to keep interest rates where they are.
Markets were closed in Japan for a holiday.
Hong Kong’s Hang Seng lost 2.1% to 24,455.60 and the Shanghai Composite index dropped 0.5% to 3,408.98.
In South Korea, the Kospi jumped 0.3% to 2,637.10, while Australia’s S&P/ASX 200 added 1.2% to 7,918.90.
Taiwan’s Taiex jumped 1.9%, while the SET in Bangkok rose 0.4%.
On Wednesday, U.S. stocks also got a boost from easing yields in the bond market. When Treasurys are paying investors less in interest, investors may be willing to pay higher prices for stocks.
The S&P 500 jumped 1.1% to 5,675.29, while the Dow Jones Industrial Average gained 0.9% to 41,964.63. The Nasdaq composite rose 1.4% to 17,750.79.
The rally followed weeks of sharp and scary swings for the U.S. stock market as investors fret over how much pain President Donald Trump will allow the economy to endure in order to remake the system. He’s said he wants manufacturing jobs back in the United States and far fewer people working for the federal government.
Trump’s barrage of announcements on tariffs and other policies have created so much uncertainty that economists worry U.S. businesses and households may freeze and pull back on their spending.
Fed Chair Jerome Powell acknowledged the rising pessimism among U.S. consumers and companies shown by recent surveys, but he also pointed to data such as relatively low unemployment that show the economy is still strong. It’s possible to have periods where “people say downbeat things about the economy and then go out and buy a new car,” he said.
“Given where we are, we think our policy is in a good place to react to what comes, and we think that the right thing to do is to wait here for greater clarity about what the economy’s doing,” Powell said.
The Fed has been holding interest rates steady this year after cutting them sharply through the end of last year. While lower rates can help give the economy a boost, they can also push inflation upward.
Fed officials indicated they’re still penciling in two cuts to the federal funds rate by the end of this year, just as they were forecasting at the end of last year. But they are also seeing weaker growth for the U.S. economy and higher inflation than they were before. More than anything, the message from the Fed seemed to be how much uncertainty is clouding everything.
Powell pushed back against fears about what’s called “ stagflation,” where the economy stagnates but inflation remains high. The Fed doesn’t have good tools to fix such a toxic combination. The last time the U.S. economy suffered through it was in the 1970s, and Powell said, “I wouldn’t say we’re in a situation that’s remotely comparable to that.”
