Asian Equities Mixed, Treasuries Dipped as Traders Weighs Hawkish Comments from Fed

Asian equities largely closed higher after traders weighing hawkish comments from Federal Reserve Chair Jerome Powell.

Shares in Mainland China closed in red while Hong Kong, Thailand, Japan and South Korea inched up. The MSCI Asian Index ex Japan topped 2.35%.

Contracts all major US benchmarks were down after the S&P 500 added 2% in a risk rebound Tuesday. Treasury yields ticked lower and the dollar snapped a three-day losing streak.

Powell said the Fed “won’t hesitate” to tighten policy beyond neutral to curb high inflation, fueling fears that higher rates and surging inflation may drive the economy into a recession.

“We’ll have this kind of volatility as people jump in and look at opportunities to buy as markets decline,” Shana Sissel, director of investments at Cope Corrales, said on Bloomberg Television, referring to the Wall Street bounce.

The Fed is going to struggle to achieve a soft economic landing, she added.

Meanwhile euro-zone and U.K’s inflation plateaued at a record high.

“This is one of the most challenging markets I have been in in my career,” Henry Peabody, fixed income portfolio manager at MFS Investment Management, said on Bloomberg Television.

“I suspect at a certain point of time we’re going to have the liquidity of the markets challenged. They really haven’t been thus far.”

Crude oil inched up with the WTI trading around $113 a barrel and the Brent trading at $113 a barrel.