Asia stocks snap winning streak, bonds rally on downbeat Fed

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Asian shares retreated on Thursday as a gloomy outlook from the U.S. Federal Reserve challenged market optimism on the global economy, while bonds rallied on speculation that yet more stimulus would be needed to ensure recovery.

FILE PHOTO: An employee of the Tokyo Stock Exchange works at the bourse in Tokyo, Japan, February 6, 2018. REUTERS/Toru Hanai

E-Mini futures for the S&P 500 fell 1.5% to extend an overnight pullback on Wall Street, while EUROSTOXX 50 futures lost 2.2% and FTSE futures 1.7%. As a result, Fed Chair Jerome Powell said he was “not even thinking about thinking about raising rates”. Instead, he emphasised recovery would be a long road and that policy would have to be proactive with rates near zero out to 2022.

Powell confirmed the Fed was studying yield curve control, a form of easing already employed by Japan and Australia.

 

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