Asian markets await key inflation data from the US

Asian markets struggled on Thursday after another lackluster performance on Wall Street, focusing on the release of key US inflation data, as traders bet the Federal Reserve will cut interest rates next year, APP reported.

Observers say signs that global and major economies are feeling a lingering strain from monetary policy have given banks room to take a more dovish stance in the fight against inflation, which is set to fall sharply in 2022 from a four-decade high.

That, along with several Fed policymakers signaling their support for keeping interest rates where they are, gave traders some much-needed reassurance at the end of a difficult year. And the latest reports added to the optimism.

The Fed's beige book summary of the economy showed that activity has slowed in recent weeks and the labor market has continued to cool. Policymakers have said some jobs are needed to restore inflation to 2 percent. Gross domestic product grew faster than expected in the third quarter, and consumption growth slowed slightly.

Indications are that the Fed is managing to keep prices under control without causing too much pain to the economy. Index of Personal Consumption Expenditure (PCE), Bank #039. the most popular measure of inflation, is now on the horizon and forecasts continue to point to a rebound.

The headline reading was slightly lower than expected, Tuesday's data showed. "The Fed may find itself in a sweet spot#039."

LPL Financial's Jeffrey Roach said. "Inflation is lower, consumers are still spending but at a slower pace, and the Fed can end its rate-raising campaign without causing much pain to the economy." Traders are now predicting a cut in the first half of next year.

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