Asian stocks and U.S. futures declined Thursday after Federal Reserve officials sped up their expected pace of policy tightening. The dollar and Treasury yields held gains.
An MSCI gauge of Asian shares was on track for its biggest slide in a month, though the number of stocks that rose and fell was evenly split. Japanese stocks underperformed, while Hong Kong shares fluctuated and Chinese equities ticked up. S&P 500 futures slipped after the benchmark closed down, but off its lows as Fed Chair Jerome Powell downplayed the risk of an immediate rate increase. Policy makers disclosed that they expect two hikes by the end of 2023 and would begin a discussion about scaling back bond purchases.
Bonds sank in Australia and New Zealand after Treasury yields jumped as the market repriced the timing of rate increases. Emerging market currencies in Asia tumbled, led by the South Korean won, after a dollar index had its biggest jump in a year. Yield premiums on investment-grade dollar bonds from borrowers in Asia ex-Japan widened.