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

Australia’s stock market could start its day higher, despite Wall Street struggling to hold onto one of its gains from the start of the session.

ASX futures were up 0.4% at 6,412 points as of 7:25 a.m. AEST on Thursday.

US markets were weighed down by comments on 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 hit a 40-year high, while trying not to cause a recession in the process.

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

The Fed Chairman said he thought the US economy was currently strong, but acknowledged that a recession could come.

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Australia’s super 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% inflation and a still strong job market.”

The Australian dollar was buying 69.3 US cents, after falling 0.7% overnight.

But it fell even more than 1% against the currencies of the euro zone and Japan, to 65.5 euro cents and 94.3 yen.

Meanwhile, oil prices fell as investors feared U.S. Fed rate hikes could push the world’s largest economy into recession, dampening demand for fuel.

Brent crude futures fell 4.3% to $109.74 a barrel.

Spot gold rose 0.3% to US$1,837.53 an ounce.

“Not out of the woods yet”

Investors are trying to gauge how far stocks may fall as they assess the risks to the economy as the US Fed hikes rates to curb soaring inflation.

Job , updated

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