Equities Mixed, Treasuries Fell as Fed Shuns Fear of Jumbo Rates Hike

Asian equities mixed and treasury fell after Federal Reserve Chair Jerome Powell eased concern the central bank will head on a more aggressive pace of tightening after delivering its steepest rate increase in two decades.

Shares in Mainland China, South Korea and Japan dipped while shares in Hong Kong is higher marginally. The MSCI Broad Market Index ex Japan dipped by 0.44%.

The Federal Open Market Committee voted unanimously to increase the benchmark rate by a half percentage point. It will begin allowing its holdings of Treasuries and mortgage-backed securities to decline in June at an initial combined monthly pace of $47.5 billion, stepping up over three months to $95 billion.

Traders pared their bets on a bigger June hike after Powell said there was “a broad sense on the committee that additional 50 basis-point increases should be on the table for the next couple of meetings.” He also dashed speculation the Fed was weighing an even larger hike of 75 basis points in the months ahead, saying that it is “not something that the committee is actively considering.” The dollar slipped.

Before the Fed decision, JPMorgan Chase & Co.’s chief Jamie Dimon said the U.S. central bank should have raised rates sooner as price pressures hit the global economy. Treasury Secretary Janet Yellen sees a possible “soft landing” as the Fed moves to bring down inflation. “I do believe we’re going to see solid growth in the coming year,” she said in an interview at a Wall Street Journal event on Wednesday.

The yield on the benchmark 10-year Treasury note rose to 3% this week for the first time since 2018. It was trading in late new York trade around 2.93%.

Crude oil trading higher with WTI around $107 a barrel while Brent is trading around $110 a barrel.