The sails of the Opera House are illuminated by projections during the opening night of Vivid Sydney 2023 on Friday, May 26, 2023, in Sydney, Australia.
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Asia-Pacific markets rose on Thursday after the Federal Reserve kept the federal funds rate at 5.25% to 5.5% and adjusted the “dot plot” to predict only one rate cut this year.
That’s down from the three cuts expected at the March meeting. However, the dot plot also points to a more aggressive path of rate cuts in 2025 – four cuts totaling one percentage point are expected, up from three.
In Asia Pacific, South Korea Cospi Leading the way, rising 1.39%, rising for a third day in a row, the small-cap Kosdaq index rose 0.6%.
Japan’s Nikkei 225 Index rose 0.56%, while the Topix edged lower.
Australia’s S&P/ASX 200 index rose 0.8%, rebounding from two days of losses.
Hongkong Hang Seng Index Futures were at 18,035, higher than the previous close of 17,937.84.
“Inflation has eased over the past year but remains elevated,” the Fed said in a post-meeting statement, echoing language in its last statement.
However, the new statement also said that “in recent months, the Committee has made modest further progress toward achieving its 2 percent inflation objective.”
Previous language said there was a “lack of further progress” on inflation.
In addition, inflation in May was unchanged from April, with an annual increase of 3.3%, which was the same as the previous quarter.
All three major U.S. stock indexes rose overnight on the Federal Reserve’s decision and May inflation data.
The S&P 500 jumped to a new all-time high and closed above 5,400 for the first time.
The broader market index rose 0.85% to close at 5,421.03 points, and the Nasdaq Index also rose 1.53%, hitting a record high. In comparison, the Dow Jones Industrial Average fell 0.09%.
—CNBC’s Lisa Kailai Han, Pia Singh and Jeff Cox contributed to this report.
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