Rate Hike Expectations Drag Global Markets

Source: WSJ

A number of stock markets across the globe retreated on Thursday, dragged by remarks of Federal Reserve officials hinting a possible rate hike in 2023.

• Declines were recorded on futures linked to the S&P 500, Nasdaq 100, and Dow Jones Industrial Average.
• Retreats were noted in most overseas markets — the Stoxx Europe 600, Japan’s Nikkei 225, South Korea’s Kospi Composite.
• Gains were recorded in the Shanghai Composite and Hong Kong’s Hang Seng.
• The 10-year US Treasury yield fell to 1.560% from Wednesday’s 1.569%.
• Gold dropped to $1,799.20 after yield-bearing investments gained traction on the possibility of higher rates.
• Risk appetite was hit after Fed officials penciled in a rate hike in late 2023 or earlier than they expected in March.
• Analysts believe the key message of the Fed is that the current situation is not permanent and it wanted to take the opportunity to signal readiness to normalize the economic environment.