Asian stocks under pressure on concerns about Fed's interest rate path

Most Asian stock markets fell on the morning of December 9, as investors grew increasingly concerned about the US Federal Reserve's interest rate path next year, following an expected rate cut this week.

An electronic board displays the KOSPI stock index at Hana Bank in Seoul, South Korea. Photo: THX/TTXVN

In China, Hong Kong's Hang Seng Index fell 0.8% to 25,569.78 points, while the Shanghai Composite Index fell 0.2% to 3,918.31 points. South Korea's Kospi Index fell 0.36% to 4,139.69 points. Meanwhile, Japan's Nikkei 225 Index rose 0.2% to 50,688.20 points.

With a near certainty that the Fed will cut interest rates on December 10, traders will be closely watching the US central bank's forecasts on monetary policy. They will also be looking to the post-meeting statement and press conference by Fed Chairman Jerome Powell for clues on the debate among policymakers.

Forecasts for a third straight rate cut and more cuts by the Fed in 2026 have surged after data showing a weakening US job market offset concerns about persistently high inflation. The likelihood has been further heightened by reports that the US president’s top economic adviser, Kevin Hassett, who favors further rate cuts, could be a candidate to head the Fed.

However, the excitement has died down in recent days. Bloomberg reported that markets are pricing in two more rate cuts next year, down from three cuts expected last week.

Senior economist Xiao Cui of Pictet Wealth Management, a US investment firm, said that solid US economic growth, above-target inflation and a slowing labor market will increase divisions within the Fed and make 2026 a particularly difficult year for policymakers. Risks to the labor market could force the Fed to cut interest rates again in December 2025, before switching to quarterly rate cuts in March and June 2026. However, she noted that it is also possible that the Fed's decision to cut interest rates will be delayed until the second half of 2026.

In the Vietnamese market, the VN-Index decreased by 11.61 points, or 0.66%, to 1,742.13 points, while the HNX-Index decreased by 8.96 points, or 1.6%, to 551.18 points.

Source: https://baotintuc.vn/thi-truong-tien-te/chung-khoan-chau-a-chiu-ap-luc-giam-do-lo-ngai-ve-lo-trinh-lai-suat-cua-fed-20251209120752283.htm