[HONG KONG] Asian markets surged on Thursday, extending a global rally that saw another record on Wall Street after the head of the Federal Reserve indicated it would take a gradual approach to raising US interest rates.
In closely watched testimony to Congress, Janet Yellen said the central bank would keep lifting borrowing costs as long as the world’s top economy showed improvement, taking into account inflation remained below its two percent target.
The remarks lit a fire under equities, with the Dow posting its highest close, on the prospect that money would continue to be cheap for the time being.
Stephen Innes, senior trader at Oanda, said she “unambiguously drew attention to inflation as the critical determinant of Fed rate hikes. Given the market’s tepid inflation expectations, traders quickly repriced an even more cautious rate hike cycle as December odds fell to 50 per cent from around 70 per cent”.
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