Asian shares slide after Wall Street rout on inflation, rate hike consequences

HONG KONG: Asian shares tumbled on Friday while the US dollar and Treasury yields rose in a reversal of a day earlier after investors expressed concerns that rising interest rates could hurt global economic growth.and some other major central banks will have to raise interest rates even more aggressively than planned to combat red-hot inflation, potentially pushing economies into a recession.MSCI's broadest index of Asia-Pacific shares outside Japan shed 2.

This was a reversal of the situation 24 hours earlier when Asian shares opened higher after the S&P 500 had recorded its biggest one-day percentage gain in nearly two years on Wednesday. The market is pricing in an 82 per cent chance of a monster 75 basis point rate hike from the Fed at its meeting in June, according to the CME's FedWatch tool, even after the Fed raised rates by 50 basis points this week and Powell ruled out a 75 basis point hike.

Chao said US and Asia Pacific equities could continue to experience"a bit of volatility", and US yields might keep rising, but he expected that momentum from the post-Omicron reopening would help support US growth despite Fed policy normalisation.

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