Asia stocks set to rally as Fed goes limitless

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Asian stocks were set to rally on Tuesday as the U.S. Federal Reserve's sweeping pledge to spend whatever it took to stabilize the financial ...

Asian stocks were set to rally on Tuesday as the U.S. Federal Reserve's sweeping pledge to spend whatever it took to stabilize the financial system eased debt market pressures, even if it could not offset the immediate economic hit of the coronavirus.

In its latest drastic step, the Fed offered to buy unlimited amounts of assets to steady markets and expanded its mandate to corporate and muni bonds. The Fed's package helped calm nerves in bond markets where yields on two-year Treasuries hit their lowest sine 2013, while 10-year yields dropped back sharply to 0.77per cent .

Goldman Sachs warned the U.S. economic growth could contract by 24per cent in the second quarter, two-and-a-half times as large as the previous postwar record. The logjam combined with the stimulus splash from the Fed to take a little of the shine off the U.S. dollar, though it remains in demand as a global store of liquidity.

 

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