Asia stock markets slide on US interest rate fears

• After the head of the US central bank declared it would keep raising interest rates to combat rising prices, shares in Asia decreased.
• The Federal Reserve’s policies, according to Jerome Powell, will hurt “certain households and companies.”
• On Monday, the Nikkei 225 index of Japan decreased by 2.7% in value.

After the head of the US central bank declared it would keep raising interest rates to combat rising prices, shares in Asia decreased.

The Federal Reserve’s policies, according to Jerome Powell, will hurt “certain households and companies.”

Higher interest rates make borrowing more expensive for people and businesses, which might stifle inflation and hinder economic growth.

On Monday, the Nikkei 225 index of Japan decreased by 2.7% in value.

The Kospi in South Korea and the ASX 200 in Australia both had declines of almost 2%, while the Hang Seng in Hong Kong experienced a 0.8% decline.

That followed a Friday decline of more than 3% in each of the major New York stock indices following comments made by Mr. Powell.

In a much-awaited address at a conference in Jackson Hole, Wyoming, Mr. Powell stated that the Federal Reserve could keep interest rates high “for some time” and was likely to continue rising them in the near future.

While the price increases would hurt American families and businesses, he claimed that the pain would be even worse if price stability was not restored.

The greatest economy in the world by gross domestic product (GDP) is experiencing the most inflation in four decades.

“Fed Chair Powell went for the jugular, conveying (an) unflinching assault on inflation,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.

“Justification for this unrelentingly hawkish posture was as plain as it was unequivocal,” he added.

Investors are also worried about the faltering Chinese economy. Hang Seng Bank China’s head economist, Dan Wang

“Due to the protracted Covid control, China’s economic outlook has gotten worse, necessitating more policy rate reductions. Without more rate cuts in China, domestic demand is too weak “She spoke.

Following a dramatic slowdown in economic growth during the second quarter of this year, China’s central bank reduced lending rates earlier this month.

Major Chinese producers of automobiles and smartphones have also been impacted by power outages in the Sichuan area.

Over the weekend, official data revealed that from January to July of last year, the profits of Chinese industrial enterprises had decreased by 1.1%.

A crisis in the country’s property market is also proving to be a major challenge to government efforts to keep the economy growing.

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