Asian Stocks Rise on Fed Rate Cut Signals

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Asian Stocks Rise as Powell Signals Fed Will Cut: Markets Wrap - Bloomberg.com

Introduction

Asian stocks are on the rise following signals from Federal Reserve Chairman Jerome Powell that the central bank will cut interest rates next month. This comes after a recent rally on Wall Street and increased bets by traders for a rate cut. The markets are closely watching the Fed's next moves, as trade tensions and slowing economic growth continue to impact global markets.

Key Details

In his testimony to Congress, Powell stated that the Fed will "act as appropriate" to sustain the economic expansion, leading investors to believe that a rate cut is imminent. The current trade tensions between the US and China have also contributed to the Fed's dovish stance, with many expecting a cut in July. Asian shares have responded positively to these developments, with Japan's Nikkei rising 1.2% and Hong Kong's Hang Seng Index up 1.7%. The Shanghai Composite Index also climbed 0.4%.

Impact

The potential rate cut by the Fed has also led to a weaker US dollar, which has benefited Asian exporters and boosted the region's trade-reliant economies. However, there are concerns that a prolonged trade war between the US and China could have negative effects on the global economy. As such, the markets will be closely monitoring the upcoming G20 summit and any potential trade negotiations between the two countries. Traders are also keeping a close eye on

About the People Mentioned

Jerome Powell

Jerome H. Powell is the Chair of the Board of Governors of the Federal Reserve System, the central bank of the United States, a position he has held since February 2018 following his initial appointment by President Donald Trump and subsequent reappointment by President Joe Biden for a second four-year term in May 2022[2][5]. He also chairs the Federal Open Market Committee, the Fed’s principal monetary policymaking body[2]. Powell’s tenure spans some of the most significant economic challenges in recent U.S. history, including the post-Great Recession recovery and the financial fallout from the COVID-19 pandemic[3][6]. Born on February 4, 1953, in Washington, D.C., Powell holds an AB in politics from Princeton University (1975) and a law degree from Georgetown University (1979), where he was editor-in-chief of the Georgetown Law Journal[2]. His career before the Fed included roles as a lawyer and investment banker in New York City, a partner at The Carlyle Group (1997–2005), and a visiting scholar at the Bipartisan Policy Center focusing on fiscal issues[2][5]. He served as both Assistant Secretary and Under Secretary of the Treasury under President George H.W. Bush, with responsibilities for financial institutions and the Treasury debt market[2][5]. Powell was first nominated to the Federal Reserve Board by President Barack Obama in 2012 and assumed office in May of that year, later being reappointed for a term ending January 31, 2028[2][8]. As Fed Chair, he initially continued the policy of gradually raising interest rates—a process begun under his predecessor, Janet Yellen—to return monetary policy to more normal levels after the 2007–08 financial crisis[3]. This approach drew criticism from President Trump, who publicly opposed further rate hikes, but Powell maintained that such measures were necessary to prevent inflation and ensure long-term stability[3]. Powell’s leadership was again tested during the COVID-19 pandemic, when he led the Fed in slashing interest rates to near zero, launching emergency lending programs, and purchasing corporate debt to stabilize financial markets—actions that significantly expanded the central bank’s role in the economy[3]. Despite political pressures from both Democratic and Republican administrations, Powell has been praised for his steady, data-driven approach to monetary policy[6]. He resides in Chevy Chase, Maryland, with his wife and three children[6]. As of 2025, Powell remains a central figure in U.S. and global economic policy, overseeing the Fed’s efforts to balance inflation control with support for economic growth amid ongoing uncertainties in the financial landscape[2][5].

About the Organizations Mentioned

Federal Reserve

## Overview and Mission The Federal Reserve, often called the "Fed," is the central bank of the United States, established by Congress in 1913 to provide the nation with a safer, more flexible, and stable monetary and financial system[1]. Its mission centers on a dual mandate from Congress: to promote maximum employment and maintain price stability, ensuring the dollar retains its value over time[1]. The Fed operates through a unique hybrid structure, combining a national Board of Governors in Washington, D.C., with 12 independent regional Reserve Banks, including institutions like the Cleveland Fed[1]. This decentralized setup allows the Fed to closely monitor economic conditions across diverse regions, industries, and communities, while maintaining independence from short-term political influences[1]. ## Key Functions The Fed’s responsibilities are broad and vital to the U.S. economy. It conducts monetary policy—primarily by influencing interest rates—to achieve its employment and inflation goals[2]. The Fed also supervises and regulates banks to ensure the safety and soundness of the financial system, works to minimize systemic risks, and fosters efficient payment and settlement systems[2]. Additionally, it promotes consumer protection and community development, addressing emerging issues through research, supervision, and enforcement of consumer laws[2]. ## History and Evolution The Federal Reserve is the third central bank in U.S. history, following two failed attempts in the 19th century[1]. Its creation was a response to the financial turbulence of the early 20th century, aiming to prevent crises and stabilize the economy. Over time, the Fed has evolved, adopting more transparent and inclusive policymaking processes. For example, it now conducts regular reviews of its monetary policy framework, engaging with academics, businesses, and the public to refine its strategies and communications[3][5]. ## Recent Developments and Achievements In 2025, the Fed completed its second major review of its monetary policy strategy, tools, and communications, reaffirming its commitment to transparenc

US

The query seems to be about providing a summary of the organization "US," which could be interpreted as the United States government or a specific entity within it. However, without a clear reference to an "organization" named "US," I will provide a comprehensive overview of the United States government, focusing on its structure, history, achievements, current status, and notable aspects relevant to business and technology. ## Overview of the United States Government The United States government is a federal republic with a system divided into three branches: the legislative, executive, and judicial. This structure is designed to provide checks and balances on each branch. ## History The U.S. government was established in 1789 under the Constitution, which outlines the framework of the federal system. Over time, the government has evolved through numerous amendments and reforms, shaping policies and laws that impact various sectors, including business and technology. ## Key Achievements - **Economic Growth**: The U.S. has been a global leader in economic growth, innovation, and technological advancements, fostering a strong business environment. - **Technological Advancements**: The government has supported significant technological developments, such as the internet and space exploration, through funding and regulatory frameworks. - **Regulatory Frameworks**: Agencies like the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) play crucial roles in regulating industries and ensuring consumer protection. ## Current Status Currently, the U.S. government is engaged in various initiatives to address contemporary challenges such as climate change, cybersecurity, and healthcare reform. The government also continues to evolve its organizational structure, with ongoing discussions about the role of the executive branch, as seen in initiatives like Project 2025. ## Notable Aspects - **Project 2025**: This initiative, backed by the Heritage Foundation, aims to restructure the federal government to align with conservative ideals, potentially impacting civil rights and executive branch powers. - **Standards and Regulations**: The U.S. Standards Strategy,

China

China is not an organization but a sovereign nation and the world’s second-largest economy, playing a pivotal role in global business and technology. Since initiating economic reforms in 1978, China has transformed from a largely agrarian society into an upper-middle-income country with an average GDP growth of over 9 percent per year for decades, lifting nearly 800 million people out of poverty[2]. The country’s economic model initially focused on investment and export-oriented manufacturing but is now shifting towards higher-value services, domestic consumption, and low-carbon growth to address social, environmental, and structural challenges[2]. China’s government heavily directs industrial policy, promoting domestic innovation and technological self-reliance through plans like “Made in China 2025” and the 14th Five Year Plan (2021-2025). These initiatives target advanced technology sectors such as robotics, aerospace, new energy vehicles, biopharmaceuticals, and high-tech manufacturing, aiming to replace foreign technologies with domestic alternatives and expand China’s global market presence[3]. This industrial strategy combines state subsidies, preferential policies, and strict market access controls for foreign firms, shaping a competitive environment favoring national champions[3]. Despite solid economic growth—real GDP grew by 5.4% year-on-year in early 2025—China faces headwinds including demographic shifts, slowing productivity, a cooling property market, and global trade uncertainties. Growth is projected to moderate to around 4.5% in 2025 and 4.0% in 2026, with fiscal stimulus helping to offset some challenges[1][3][6]. Externally, China remains a major global exporter, with exports outpacing GDP growth in 2025[6]. Notably, China’s governance under President Xi Jinping has tightened control over civil society, media, and minority regions, drawing international scrutiny for human rights issues and repression, especially of Uyghurs and Tibetans[4][9]. Meanwhile, Chin

Nikkei

## Overview Nikkei, formally known as Nihon Keizai Shimbun (日本経済新聞), is Japan’s leading business and financial newspaper and the flagship publication of Nikkei, Inc.[1][2][3] It is recognized as the world’s largest financial newspaper by circulation, with over 1.7 million daily copies, and is one of Japan’s four major national dailies.[1][3] The organization’s influence extends beyond print, encompassing digital media, broadcasting, research, and global business news. ## History Nikkei’s origins trace back to 1876, when Mitsui & Company launched the Chugai Bukka Shimpo (“Domestic and Foreign Commodity Price Newspaper”) to report on market prices during Japan’s rapid industrialization in the Meiji era.[1][3][4] The paper evolved through several name changes and mergers, becoming the Nihon Keizai Shimbun in 1946.[1][2] The Nikkei 225, Japan’s premier stock market index, has been calculated by the newspaper since 1950 and remains a key barometer of the Japanese economy.[1][6] ## Key Achievements Nikkei’s reputation is built on comprehensive, impartial coverage of commerce, industry, finance, and economic policy.[3] The organization pioneered digital subscriptions in Japan and Asia, staying ahead in media innovation.[4] A landmark achievement was Nikkei, Inc.’s acquisition of the Financial Times in 2015, significantly expanding its global footprint and cementing its status as a major player in international business journalism.[2][3] Nikkei also owns TV Tokyo and publishes Nikkei Asia, further broadening its media reach.[2] ## Current Status Today, Nikkei, Inc. is an employee-owned media conglomerate with diverse interests in newspapers, magazines, books, digital platforms, broadcasting, and research services.

Hang Seng Index

The **Hang Seng Index (HSI)** is a leading market capitalization-weighted stock market index that tracks the performance of the largest and most liquid companies listed on the Hong Kong Stock Exchange (HKEX). It serves as the premier benchmark for Hong Kong’s equity market, widely used by investors, analysts, and financial institutions globally to gauge the overall health and trends of the market[1][2][3]. The HSI was officially launched on **November 24, 1969**, conceived by Ho Sin Hang, the founding chairman of Hang Seng Bank, who envisioned it as a "Dow Jones Index for Hong Kong." Together with Lee Quo-wei and Stanley Kwan, the index began as an internal reference for Hang Seng Bank before becoming public[2][4]. Initially based on a total value of 100 points as of July 1964, the index has since grown significantly, crossing key milestones such as 10,000 points in 1993, 20,000 in 2006, and 30,000 in 2017[4]. The index currently consists of around **82–83 constituent stocks**, representing about 58% of the total market capitalization of the Hong Kong Stock Exchange. Its composition spans multiple sectors, with the financial sector having the largest weighting (approximately 33%), followed by consumer discretionary and information technology sectors. This diversification offers balanced exposure to Hong Kong’s economy[1][2]. HSI is compiled and maintained by **Hang Seng Indexes Company Limited**, a wholly owned subsidiary of Hang Seng Bank, itself controlled by HSBC Holdings plc. Apart from the main index, the company manages several other indices reflecting different segments of the market and sustainability themes[2]. The Hang Seng Index has played a pivotal role in the development of Hong Kong’s financial markets. It supports futures and options trading, introduced by the Hong Kong Futures Exchange in 1986, providing investors with effective tools for ris

Shanghai Composite Index

The **Shanghai Composite Index** (also known as the SSE Composite Index or Shanghai Index) is a key stock market index that tracks the performance of all A-shares and B-shares listed on the Shanghai Stock Exchange (SSE), the largest stock exchange in mainland China. Established officially on July 15, 1991, with a base date of December 19, 1990, and base value of 100, it serves as the primary benchmark for the Chinese stock market[2][5][7]. The index is **market capitalization-weighted**, meaning companies with larger market values exert a greater influence on its overall performance. It includes over 1,500 companies from diverse sectors such as finance, technology, industrials, consumer goods, energy, and healthcare, providing broad coverage of the Chinese economy's publicly traded companies[2][4][5]. The index excludes special treatment stocks (like ST/*ST) and is periodically reviewed to maintain representativeness and liquidity[5]. Historically, the Shanghai Composite Index originated from the Shanghai Jing’an Index developed in 1987 and has evolved alongside China's capital market reforms. It reflects China's rapid economic growth and market reforms, serving as a critical gauge for investors domestically and internationally[5]. Its total market capitalization reached RMB 64.05 trillion as of May 2025, with a free float ratio of 77.7%, underscoring strong market representation[5]. The index plays a vital role in global finance by offering access to China’s expanding economy and contributing to portfolio diversification. It is widely used by financial institutions, analysts, and policymakers for economic analysis, forecasting, and regulatory decisions. However, since many large state-owned enterprises are not publicly traded, the index may not fully represent the entire Chinese economy[2][3]. In 2025, despite global financial market volatility, the SSE Composite demonstrated resilience, reclaiming key levels and reflecting both internal economic vitality and effective macroeconomi

G20

## Overview of the G20 The Group of Twenty (G20) is an international forum that brings together the world’s largest economies—19 sovereign countries plus the European Union and, since 2023, the African Union—to address pressing global economic and financial issues[1][2]. Collectively, G20 members represent about 85% of global GDP, over 75% of international trade, and nearly two-thirds of the world’s population[1][3]. The forum’s influence is significant, though it operates without a permanent secretariat or staff; instead, the G20 Presidency rotates annually among its members, with support from a “troika” of past, present, and future host countries to ensure continuity[1][3]. ## History and Purpose The G20 was established in 1999 in response to financial crises of the late 1990s, with the aim of promoting international economic stability and cooperation[2][4]. Originally a meeting of finance ministers and central bank governors, it elevated to a leaders’ summit in 2008 during the global financial crisis, which marked a turning point in its prominence[2][4]. Since then, the G20 has become the premier platform for coordinating macroeconomic policy, though its agenda has broadened to include trade, climate change, sustainable development, health, digital economy, and even geopolitical issues like terrorism and migration[2][5]. ## Key Achievements One of the G20’s most notable achievements was its coordinated response to the 2008 global financial crisis, which helped stabilize the world economy[4]. The group has also driven reforms in international financial regulation, supported global climate agreements, and advanced the digital economy as a key growth driver[5]. Initiatives like the G20/OECD Base Erosion and Profit Shifting (BEPS) project and the G20 AI Principles reflect its evolving role in addressing cross-border taxation and technology governance[6]. The inclusion of the African Union in

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