Asian Equites Rose, Treasuries Slips After Powell Pushed Back Market Speculation on Rates Hike

Asian equities rose on Friday after Federal Reserve Chair Jerome Powell again pushed back against speculation of more aggressive interest-rate hikes.

Shares in Mainland China, Japan, Hong Kong and South Korea rose sharply. The MSCI Asian Broad Market ex Japan dipped 2.42%.

Powell reaffirmed the Fed is likely to raise rates by a half point at each of its next two meetings and isn’t “actively considering” a 75 basis-point move.

However he left the possibility of hiking rates further if need to bring inflation under control.

The dollar gained while treasuries dropped. The 10-year U.S. yield is about 2.89%.

It’s a “very tough time,” Kathy Entwistle, managing director at Morgan Stanley Private Wealth Management, said on Bloomberg Television.

“We’re holding just still and quiet and patient and waiting for some more insights as to where we’re going. We still see a lot of volatility on the horizon.”

The latest US data showed producer prices jumped 11% from April last year, signaling that consumer inflation could continue to stay high.

Crude oil trading higher with WTI trading around $107 a barrel and the Brent trading around $108 a barrel.