Global Stocks Mixed After Fed Says Ready to Act on Inflation

By The Associated Press
The Associated Press
The Associated Press
November 25, 2021 Updated: November 25, 2021

BEIJING—Global stock markets mostly rose Thursday after Federal Reserve officials indicated they were ready to hike interest rates sooner than expected if needed to cool U.S. inflation.

London, Tokyo, Frankfurt, and Hong Kong markets advanced, while Shanghai declined.

Wall Street futures were higher. U.S. markets were closed for the Thanksgiving holiday. They reopen Friday for a shortened trading session.

Fed officials at their October policy meeting said they “would not hesitate” to respond to inflation, according to notes released Wednesday. They foresaw the possibility of raising rates “sooner than participants currently anticipated.”

That fueled investor fears the Fed and other central banks might feel pressure to withdraw economic stimulus that has been boosting stock prices. Fed officials earlier indicated they might raise rates late next year.

Higher prices combined with stronger U.S. hiring suggest the attitude at the next Fed meeting might be “unabashedly more hawkish,” said Tan Boon Heng of Mizuho Bank in a report.

In early trading, the FTSE in London rose less than 0.1 percent to 7,289.90 and the DAX in Frankfurt gained 0.3 percent to 15,927.78. The CAC 40 in Paris added 0.3 percent to 7,063.84.

Futures for the S&P 500 and the Dow Jones Industrial Average were up 0.3 percent.

In Asia, the Shanghai Composite Index lost 0.2 percent to 3,584.18 while the Nikkei 225 in Tokyo gained 0.7 percent to 29,499.28. The Hang Seng in Hong Kong advanced 0.2 percent to 24,740.16.

The Kospi in Seoul lost 0.5 percent to 2,980.27 after the Korean central bank raised its policy interest rate by 0.25 percentage points to 1 percent in line with expectations.

A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea on Nov. 25, 2021. (Ahn Young-joon/AP Photo)

Sydney’s S&P-ASX 200 added 0.1 percent to 7,407.30 and India’s Sensex gained 0.8 percent to 58,811.46. New Zealand and Jakarta advanced while Bangkok declined.

On Wall Street, the S&P 500 advanced 0.2 percent. Gains in technology, real estate and energy stocks outweighed a slide in banks and materials companies.

The Dow slipped less than 0.1 percent while the Nasdaq composite gained 0.4 percent.

The Fed notes showed officials still believe this year’s inflation spike is likely to be temporary but acknowledged prices rose more than expected.

The notes covered the October meeting at which Fed board members voted to take the first steps to roll back easy credit and other measures to support an economic recovery from the coronavirus pandemic.

A wide range of industries have been hit by inflation pressures and disruptions in supplies of raw materials and components. Forecasters worry consumers might cut spending if retail prices keep rising.

Consumer spending rose 1.3 percent in October, slightly more than double the previous month’s rise, according to the U.S. Commerce Department.

The Labor Department reported the number of Americans applying for unemployment benefits fell last week to its lowest level in more than half a century.

In energy markets, benchmark U.S. crude lost 5 cents to $78.34 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 10 cents to $81.15 per barrel in London.

The dollar fell to 115.36 yen from 115.48 yen. The euro advanced to $1.1221 from $1.1199.

By Joe Mcdonald