Asia markets track Wall St plunge as rate hike fears grow
Asian markets fell further on Friday after Federal Reserve boss Jerome Powell failed to soothe fears of a surge in inflation fuelled by the expected global economic recovery, which many warn could force the central bank to hike interest rates earlier than thought. While the rollout of vaccines, slowing infections, easing of lockdowns and an imminent new stimulus are breathing life back into economies, investors are increasingly worried ultra-loose monetary policies – a key pillar of a year-long equity surge – will be wound down to deal with an expected spike in prices. That has led to a sharp sell-off across world markets with the tech-rich Nasdaq on Thursday almost sinking into correction territory – a 10 per cent drop from recent highs – having touched a record peak last month. Powell reiterated that the Fed would not tighten its policies until its goals of full employment and consistently high inflation had been met, and that was likely to be some time away. As the economy recovers, he said “you could see prices moving up” but those increases are likely to be transient. “And this is a difference between a one-time surge in prices and ongoing inflation.” Mona Mahajan, at...