Fed rate hike
Asian stocks dip after early gains
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Asian stocks lost early gains yesterday after the United States Federal Reserve made its biggest interest rate hike in 28 years in a bid to tackle inflation.
Singapore's Straits Times Index rose by around 1.4 per cent within the first half hour of the opening bell before receding to end 0.27 per cent lower.
The rate hike is expected to impact borrowing costs, such as for home loans and credit card bills, though the Fed does not set those interest rates.
But analysts noted that inflation, being largely caused by supply-side factors such as the war in Ukraine and supply chain disruptions, may prove to be impervious to rate hikes. This is because while higher rates can dampen demand, these supply issues remain unabated.
Fed chief Jerome Powell said the US central bank may consider another similar increase at its next meeting next month.
