Asian Markets Open Lower After Fed’s Caution on Inflation

Asian equities started the day on a weaker note on Thursday after US Federal Reserve Chair Jerome Powell signaled a sharp pickup in inflation over the coming months. His statement caused concern among global investors, leading to a decline in regional stock markets.

MSCI Asia Index Slips; Japan & Australia Lead Losses

The MSCI’s regional gauge of Asia-Pacific shares dropped 0.3%, reflecting broad caution across key markets. Japan and Australia opened lower, reacting to Powell’s comments and the lack of fresh positive triggers globally.

At the same time, US equity futures also slipped around 0.3%, following a steady close for the S&P 500 in the previous session.

Fed Leaves Rates Unchanged, But Warns of Challenges Ahead

In its latest policy meeting, the Federal Reserve kept interest rates unchanged but reiterated its plan for two possible rate cuts later this year. However, Powell noted that economic uncertainty from tariffs and rising inflation risks are clouding the central bank’s outlook.

“Inflation may pick up meaningfully,” Powell stated, citing global pressures and trade tensions that could impact the Fed’s ability to ease policy smoothly.

Global Markets Wait for Clarity Amid Geopolitical Tensions

The global markets remained directionless, with muted movements across major asset classes. While the dollar held steady, cash trading in US Treasuries was shut for a holiday, keeping bond market cues subdued.

Meanwhile, crude oil prices remained stable, as the Trump administration gave no strong indication about whether the US would support Israel’s military actions against Iran’s nuclear facilities.

This added to investor uncertainty, as geopolitical risks in the Middle East continue to loom over market sentiment.

Outlook: Investors Seek Direction Amid Inflation & Conflict Risks

With rising inflation fears, geopolitical tensions, and unclear signals from central banks, global markets are treading cautiously. Asian investors are now watching for new data on the US economy, inflation trends, and further updates on international conflicts that could shake market stability.

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