The cut suggests the US economy, Asia's biggest export market, is stalling. US consumer confidence is at a nine-year low and unemployment is rising.
From Singapore to South Korea, Asian economies are still recovering from a slump caused by last year's recession in the US, which cut demand for the region's cars, computer chips and other goods. With interest rates at or near record lows, there's little more most Asian nations can do to shield their economies from another US recession.
"The Fed's decision to cut by half a percent may be viewed by Asian central banks as an increased growth risk in the US," said Mike Moran, an economist at Standard Chartered Bank in Hong Kong.
"That in turn may prompt Asian policymakers to be more dovish in setting rates going forward." In a Bloomberg survey of 133 economists, only 17 forecast the Fed would cut rates by half a point. The European Central Bank and the Bank of England are expected follow the Fed and cut key interest rates, possibly as early as today.
In Thailand, the central bank "will probably follow a rate cut by the Fed," said Thanomsri Fongarunrung, an economist at Merrill Lynch Phatra Securities Ltd.
A rate cut would boost economic growth and keep the Thai baht from gaining ground against the dollar, helping exports. The baht has risen more than 2 percent to 43.26 to the US dollar since falling to a nine-month low last month.
The private group of economists that monitors the US economy said "recent data" will cause it to delay an announcement saying the recession that began in March last year is over.
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