Asian stocks cheer a confusing Fed

Stock markets across Asia are playing off a confusing Fed which hinted at December rate hike, but revised long-term rate expectations lower, coupled with downwardly revised economic forecasts.

Australia’s S&P/ASX 200 jumped 0.80%. Stocks in New Zealand traded largely flat on the day. Hong Kong’s Hang Seng gained 1.35%, while China’s Shanghai Composite added 0.51%.

Wall Street strengthened as well with Nasdaq closing at a record high. Fed Chair Yellen said US growth was looking stronger and rate increases would be needed to keep the economy from overheating and fuelling high inflation.

However, once again the policymakers did not walk the talk. The dot chart showed sharp downward revision in the median interest rate forecast. Consequently, buying interest in the Asian equities spiked. Japan’s Tokyo index is closed on account of the trading holiday.