Asian stocks rose, heading for a six-month high, after the Federal Reserve said data suggest U.S. economic growth has moderated and officials indicated interest rates will rise at a slower pace than previously forecast.
The MSCI Asia Pacific Index gained 1 percent to 147.39 as of 9:00 a.m. in Tokyo, on course to close at the highest level since Sept. 9. U.S. stocks and bonds jumped Wednesday as the Fed lowered its estimate for where the federal funds rate will be by the end of 2015 to 0.625 percent, versus a December forecast of 1.125 percent. In a new set of quarterly projections, policy makers cut forecasts for economic growth and inflation.
“This is a very important development as it means that the Fed believes that the recent buoyancy in the U.S. labor market has not yet reached a level that warrants a rate hike,” said Matthew Sherwood, head of investment markets research in Sydney at Perpetual Ltd., which manages about $21 billion. “The statement, I think, severely reduced the odds of a June rate hike expected by the market.”
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