Asia Stocks Plunge after Fed’s Decision of Keeping Rates at 0.25% through 2022!

Stocks in Asia set to fall on Thursday, June 11, 2020, after the Federal Reserve expected to keep the policy rate near zero through 2022.

 

As of 9:02 local time in Thailand (GMT+7), Nikkei fell 0.96%, SSEC dropped 0.09%, HSI shedded 0.11%, ASX 200 plunged 1.39%, while Kospi rose 0.11%.

Overnight, Dow Jones dropped 282.31 points or 1.04% to close the day at 26,989.99 points. S&P 500 fell 0.53%, while Nasdaq extended its gain by 0.67%.

 

The Fed affirmed its decision to maintain the policy rate at 0.00-0.25%, saying that the level of near-zero will be where the Fed stands during the economic recovery from the coronavirus outbreak.

“We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates,” said Fed Chairman Jerome Powell on Wednesday. “What we’re thinking about is providing support for the economy. We think this is going to take some time.”

Aside from announcing the decision of keeping the rates, the Fed forecasted that the U.S. economy will shrink 6.5% in 2020, and would recover to a gain of 5% in 2021 and 3.5% in 2022. Meanwhile, the U.S. unemployment rate is expected at 9.3% for 2020.

 

Krungsri Securities saw a negative trend for today’s session in SET Index after the Fed’s announcement of keeping the rates at 0-0.25%, expecting SET to move between 1,400-1,410 points. Moreover, the Fed also forecasted a 6.5% contraction of the U.S. economy this year, along with an unemployment rate of 9.3% in 2020, causing negative sentiment to investors.