Asia markets set for rebound as Fed’s Powell signals rate cuts are on the horizon – NBC Los Angeles

This is CNBC’s live blog covering Asia-Pacific markets.

Asia-Pacific markets were set to rebound after comments from U.S. Federal Reserve Chair Jerome Powell hinted that interest rate cuts may not be too distant if inflation signals support.

Speaking to the Senate Banking Committee, Powell didn’t offer an exact timeline for rate cuts, but noted they would go down soon.

“We’re waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we’re not far from it, it’ll be appropriate to begin to dial back the level of restriction,” Powell said in response to a question about rates and inflation. 

In Australia, the S&P/ASX 200 was on pace for a third straight day of gains, opening up 0.48%.

Japan’s Nikkei 225 could go either way ahead of its January household spending numbers, which will give a clue to whether inflation is outpacing wage gains, which is being closely watched by the Bank of Japan.

The futures contract in Chicago was at 39,655 and its counterpart in Osaka at 39,530 against the index’s last close of 39.598.71.

Futures for Hong Kong’s Hang Seng index stood at 16,329, pointing to a stronger open compared with the HSI’s close of 16,229.78.

Overnight in the U.S., both the S&P 500 and Nasdaq Composite surged to record highs, as hopes over easing inflation and gains in tech aided Wall Street’s midweek bounce.

The broad S&P 500 advanced 1.03% to 5,157.36, while the tech-heavy Nasdaq Composite climbed 1.51% to 16,273.38.

Both notched all-time highs during the session, while the S&P 500 also clinched a closing record. Separately, the Dow Jones Industrial Average gained 0.34%.

— CNBC’s Sarah Min and Alex Harring contributed to this report

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CNBC Pro subscribers can read about the Nvidia customers whose stock is rallying.

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CNBC Pro subscribers can read more here.

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Oil prices edge lower as market weights interest rate outlook

Oil prices edged lower Thursday, giving up some of the previous session’s gains.

The West Texas Intermediate contract for April lost 20 cents, or 0.25%, to settle at $78.93 a barrel. May Brent futures shed 21 cents, or 0.25%, to $82.77 a barrel.

U.S. crude and the global benchmark gained more than 1% on Wednesday after Federal Reserve Chairman Jerome Powell told Congress that interest rates have likely peaked and are expected to come down this year, although the central bank is taking a cautious approach given an uncertain economic outlook.

In a second day of testimony, Powell told the Senate Banking Committee Thursday that the Fed is “not far” from the point of cutting rates, so long as inflation moves sustainably at 2%.

Powell’s testimony before Congress provided the oil market with an adrenaline rush, but his cautious approach on rates ultimately dented traders’ enthusiasm, Tamas Varga, an analyst at broker PVM, wrote Thursday.

— Spencer Kimball

Powell says Fed ‘not far from’ being ready to cut rates

Federal Reserve Chair Jerome Powell said inflation is nearing the point where officials would feel comfortable about cutting interest rates.

“We’re waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction,” Powell said Thursday during testimony before the Senate Banking Committee.

He noted that cuts would be necessary “so that we don’t, you know, drive the economy into recession rather than normalizing policy as the economy gets back to normal.”

—Jeff Cox

Fed’s Mester sees greater danger in cutting rates prematurely

Cleveland Federal Reserve President worries more about cutting rates too quickly than keeping them elevated for too long.

In a speech Thursday, the central bank official called reducing too quickly “the bigger mistake” compared to waiting too long to track the path of inflation. The Fed seeks 2% inflation, and Mester and other officials have said that progress is being made but they’re not convinced enough yet to start easing.

“Doing so would undermine all of the good work that has gone into getting inflation to this point,” she said in prepared remarks. “We don’t want to find ourselves in a situation where we begin easing too soon, undo some of the progress we have made on inflation, potentially destabilize inflation expectations, and then have to reverse course. And with labor markets and economic growth both being very solid, we don’t need to take that risk.”

Mester is a voting member this year of the rate-setting Federal Open Market Committee.

—Jeff Cox