FX.co ★ Asian Stocks Drop on Hawkish Fed Bets

Asian equity markets fell on Monday after hawkish comments from Federal Reserve Chair Kevin Warsh reignited expectations of a US interest rate hike in September. In his Jackson Hole speech on Friday, Warsh cautioned that inflation is not slowing in a meaningful way and reiterated policymakers’ resolve to return it to their 2% target. Sentiment was further pressured by a sharp rise in oil prices following US military strikes on Iranian rocket launchers that were preparing to deploy mines in the Strait of Hormuz. Tech-focused stock indices in Japan and South Korea led the declines, with equities in China and Hong Kong also finishing lower.