Hong Kong: Asian stock markets were mixed on Thursday, as investors took a breather after the recent stock market rally, while optimism about the global economic recovery is still due to concerns that rising inflation will force central banks to tighten monetary policies earlier than announced Monetary policy and shame.
Since the collapse caused by the pandemic last year, the introduction of vaccines, the reopening of the economy, the trillion-dollar stimulus plan and the generous donation of the central bank have all contributed to a rebound in global stock markets.
Although this huge profligacy seems to have paid off, people’s lives have gradually returned to normal, and businesses have resumed operations, in recent months, traders have become increasingly concerned about the impact on prices.
Although most senior officials headed by the Federal Reserve have repeatedly stated that the increase in inflation will be temporary and that its ultra-loose monetary policy will remain in place until the recovery is on track, investors are still concerned about this.
There are signs of movement, however, in some capitals with the central banks of New Zealand, Canada and Norway suggesting they could start tapering their bond-buying programmes or even interest rates as soon as next year, while Iceland has already done so.
“Investors appear to be giving the Fed the benefit of the doubt with their transitory inflation forecast, but we suspect the window of confidence could close without supporting evidence in coming months,” Craig W. Johnson, strategist at Piper Sandler & Co, said.
He added that until dealers have a better handle on the likely course of inflation and banks’ plans, markets would likely continue to be gripped by volatility and economic uncertainty.