Fed expected to hold interest rates in June meeting
ALBAWABA – Asian stocks rose and European stocks slightly slipped on Tuesday over expectations that the Federal Reserve (Fed) may hold the current interest rates when the Board convenes next week, Reuters reported.
The broadest Asia-Pacific shares index outside Japan, MSCI, rose 0.17 percent and Tokyo’s Nikkei gained 0.65 percent, the news agency reported.
Meanwhile, Eurostoxx 50 futures dropped 0.05 percent, German DAX futures 0.06 percent, and FTSE futures lost 0.04 percent at opening Tuesday.
Australia's S&P/ASX 200 index lost one percent, while the Australian dollar jumped one percent, after the central bank raised interest rates by a quarter-point to an 11-year high, according to Reuters.
The Reserve Bank of Australia also warned that further hikes may be in order, to ensure inflation returns to target.
Reuters predicted that the Australian central bank’s move may usher in a series of rate hikes and policy decisions in the coming week.
The Fed, as well as the European Central Bank and the Bank of Japan, are all slated to hold policy meetings in the next several days. The Fed’s meeting is slated for June 13-14.
Markets are pegged on an 82 percent chance the Fed will hold current rates, according to CME FedWatch tool.
In just a little over a year, the Fed raised interest rates by nearly 5 percent, and it is possible that the board may raise rates up to 6 or 6.5 percent in the coming months.
