Fed cut sets stage for Asia’s next easing wave amid trade strains

Asian central banks may find more room to ease policy after the Federal Reserve cut interest rates by a quarter percentage point Wednesday and signaled more reductions ahead, as the region contends with trade headwinds and currency pressures.

The cut brought the Fed's benchmark overnight lending rate to 4%-4.25%. Fed Chair Jerome Powell framed the decision as a "risk management cut," rather than something more directed at shoring up a weak economy, and indicated two more cuts are likely this year.

The Fed's move may have also narrowed the gap between U.S. and Asian bond yields, easing currency concerns and giving some Asian economies — particularly those facing greater domestic headwinds — more room to lower rates, said Peiqian Liu, Asia economist at Fidelity International.

"The overall