Through Ambar Warrick,
Investing.com— Most Asian stock markets went down on Monday because of Jerome Powell’s hawkish comments. He said that the Federal Reserve had no plans to slow down the rate of interest rate hikes, which made investors nervous.
Related: Asian Currencies: The Chinese Yuan Drops Nearly 2 Years
With losses of more than 2% each, the bourses in Japan, Taiwan, and South Korea had the worst morning trade.
Losses on regional markets last week mirrored a brutal session on Wall Street, where the three major indexes each fell between 3% and 4%. Equities have declined after Powell stated during his speech at the Jackson Hole Symposium that the Fed has no plans to make a dovish pivot and will instead keep rising interest rates.
Powell also warned that high interest rates and high inflation could stifle US economic growth.
In response to the Fed Chair’s remarks, more people are now betting that the Fed will boost interest rates by 75 basis points in September and that they will close the year much above 3%.
Related: Asian currencies are trapped between low inflation and tightening Fed policy.
Fed Chair Jerome Powell did what he needed to do last Friday at Jackson Hole, according to analysts at ING. Powell made it clear that the Fed’s first objective was to bring inflation down rather than guarantee that they would be patient with the markets.
Now the focus is on US payroll figures that will be released later this week. The central bank may have even more room to tighten monetary policy if the job market is solid.
Blue-chip Shanghai Shenzhen The CSI 300 index in China fell 0.6%, while the heavily weighted Hang Seng index in Hong Kong fell 0.7%.
A severe drought that has affected some regions of China and interrupted industrial activity across the nation is currently causing power shortages. The weekend’s data also revealed that China’s industrial earnings fell again in July.
In the Asia-Pacific region, Australian stocks fell more than 2% because people were still worried about China, which is a big trading partner.
Related: Asian shares rally on an aggressive RBNZ
Fortescue Metals Group (ASX:FMG), the fourth-largest producer of iron ore in the world, saw a reduction in yearly profit of 40%, which sent shares of the miner down almost 4%.
