Stocks Drop as Warsh Fans US Rate Hike Bets, Crude up on US-Iran Strikes
Traders raised September hike bets to 60% after Kevin Warsh warned inflation remains a concern, sending Asian equities and futures lower.
- On Monday, the Korea Composite Stock Price Index tumbled 2.58 percent as Asian markets opened defensively following hawkish comments from Federal Reserve Chair Kevin Warsh at Friday's Jackson Hole speech.
- Warsh warned that inflation is not meaningfully slowing and described interest rates as the Fed's 'predominant tool,' prompting traders to lift the probability of a September rate hike to 60 percent.
- Brent crude climbed 1.4 percent to US$89.30 a barrel after the US military struck Iranian rocket launchers on Sunday preparing to send mines into the Strait of Hormuz, ending weeks of relative calm.
- The US dollar held gains against major peers after posting its biggest increase in about a month on Friday, while Treasury Secretary Scott Bessent works to rein in elevated bond volatility.
- Swaps data indicates traders expect the Fed to tighten policy at least once more over the coming year, though Li Xianglong, an analyst at Great Wall Securities, warned volatility in US Treasuries may exceed expectations.
13 Articles
13 Articles
Stocks drop as Warsh fans US rate hike bets, crude up on US-Iran strikes
With inflation remaining stubbornly high -- largely on the back of elevated energy costs -- the US central bank has come under pressure to act, and Warsh's refusal to provide guidance has stoked uncertainty. But in a highly anticipated speech at the Jackson Hole symposium of central bankers and economists in Wyoming, he left traders with few doubts that he was ready to increase borrowing costs. Warsh said: "We must be confident that underlying i…
South China Morning Post
BizTocChina bond market diverges from US as Warsh strikes hawkish tone at Jackson Hole
The divergence of the bond markets in China and the US risks widening further, as economic data remained underwhelming at the Asian nation, while Federal Reserve chairman Kevin Warsh’s hawkish tone and concerns about fiscal sustainability add to the headwinds for Treasuries. The yield on China’s 10-year government bond traded at 1.692 per cent on Monday, approaching the lowest in a year after the key set of economic figures trailed analysts’ est…
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