Australian Economy

ASX likely to rise, Wall Street slips as Jerome Powell says US recession is a ‘possibility’

The Australian share market may begin its day higher, despite Wall Street’s struggle to hold onto any of its gains from earlier in the session.

ASX futures were up 0.4 per cent, to 6,412 points, by 8:40am AEST on Thursday.

US markets were weighed down by comments about inflation from Federal Reserve chairman Jerome Powell, who appeared before the Senate Banking Committee on Wednesday (local time).

He said the Fed was “strongly committed” to bringing down inflation, which had reached its highest level in 40 years, while trying not to cause a recession in the process.

However, Mr Powell said that achieving a “soft landing” for the US economy would be “very challenging”.

The Fed chair said he believed the US economy is currently strong, but acknowledged that a recession could happen.

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AustralianSuper boss says a recession is coming.

“And, frankly, the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2 per cent inflation and still a strong labour market.”

The United Kingdom is also struggling with the rising cost of living. The latest figures showed that inflation lifted to 9.1 per cent in May — a fresh 40-year high for the British economy.

‘Global forces’ sink Aussie dollar

The Australian dollar was buying 69.2 US cents, after falling by 0.7 per cent overnight.

But it fell by an even steeper 1 per cent against the Eurozone and Japanese currencies, down to 65.5 euro cents and 94.3 yen.

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