Asia markets slip after Fed cuts rates again

December 11, 2025 (MLN): Asia markets retreated on Thursday, giving up early gains after the U.S. Federal Reserve delivered its third interest rate cut of the year and signaled a pause in easing.

The Fed lowered its benchmark Federal Funds rate by 25 basis points to a range of 3.5%–3.75%, with Chair Jerome Powell stating the central bank is now in a comfortable position to observe economic developments.

Powell added that President Donald Trump’s tariffs had contributed to elevated inflation pressures. Following the declaration, the U.S. dollar index weakened to 98.54, its lowest level since October 21, according to CNBC.

Japan’s Nikkei 225 initially opened higher but later slipped 0.58%, while the broader Topix declined 0.52%.

South Korea’s Kospi also reversed early momentum to fall 0.56%, and the tech-heavy Kosdaq shed 0.36%.

Hong Kong’s Hang Seng Index posted a modest 0.1% gain, but mainland China’s CSI 300 edged down.

Alongside its rate cut, the Fed revealed it would restart purchases of $40bn in Treasury bills beginning Friday, sending short-term yields lower.

The central bank also adjusted its assessment of the U.S. labor market, removing language indicating unemployment “remained low,” highlighting a shift toward economic support rather than inflation control.

On Wall Street, U.S. equities rallied after the Fed’s decision. The Dow Jones Industrial Average jumped 1.1%, the S&P 500 gained 0.7%, and the Nasdaq Composite added 0.3% in Wednesday’s session.

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