Aug 29, 2022 01:02AM ET
By: AnalysisWatch
Most Asian stock markets fell on Monday after comments from Federal Reserve Chairman Jerome Powell showed that the central bank has no intention of slowing its pace of interest rate hikes.
Stock markets in Japan, Taiwan, and South Korea were the worst performers in morning trading, losing more than 2 each.
The losses in regional markets added to a choppy session on Wall Street last week, with all three major indexes losing between 3% and 4%. The weakness in equities comes after Powell, speaking at the Jackson Hole Symposium, said the Fed has no plans for a dovish pivot and intends to continue raising interest rates.
Powell also warned that high interest rates and high levels of inflation could stifle U.S. economic growth.
The Fed chairman's comments raised bets that the Fed will raise rates by 75 basis points in September and that interest rates will end the year well above 3%.
Fed Chairman Jerome Powell did what he had to do last Friday in Jackson Hole, and that was to make it clear that the Fed's absolute priority was to lower inflation...not to give assurances that they would be kind to the markets," wrote analysts at ING in a note.
Attention now turns to U.S. payrolls data due later in the week. A strong labor market could give the central bank more room to tighten monetary policy.
China is battling a severe drought in some provinces, which has caused power shortages and also disrupted industrial activity in some parts of the country. Weekend data also showed that China's industrial profits continued to decline in July.
In the Asia-Pacific region, Australian stocks plunged nearly 2% on continued concerns about their major trading partner, China.