Bangkok, Feb 11 (BNA): Stocks tumbled Friday in Asia after Wall Street tumbled amid news that US inflation jumped 7.5% in January, raising expectations that the Federal Reserve will need to move aggressively to calm the economy by raising interest rates. .
The S&P 500 fell 1.8% on the back of the hottest inflation report since 1982. Bond yields jumped as traders bet the Fed may have to apply the brakes on the economy with a larger-than-usual increase in interest rates next month.
The yield on the 10-year Treasury crossed 2% for the first time since August 2019, according to Tradeweb.
Asian economies are also feeling the heat of sharp price increases, with some like New Zealand already moving to raise interest rates. While others stuck – the central banks of Thailand, Indonesia and India this week opted to keep benchmark interest rates unchanged.
Some countries in the region, such as China and Japan, are struggling with rising prices and slowing growth, and some are still embroiled in the coronavirus outbreak that is hampering their prospects of recovering from the pandemic.
Trading has been choppy this year as investors puzzle over how quickly and how much the Federal Reserve will raise interest rates to tame high inflation. The S&P 500 benchmark has fallen three out of the past five weeks and is now 6.1% below its all-time high on Jan. 3.
A strong job market and high inflation have forced the Federal Reserve to begin removing the massive aid that has been pumped into financial markets throughout the pandemic. Raising interest rates can help curb inflation, but it will also put downward pressure on all kinds of investments, from stocks to cryptocurrencies.
Brent crude, the global oil price base, lost 76 cents to $90.65 a barrel.
The dollar rose to 116.06 yen from 116.02 yen. The euro fell to 1.1380 dollars from 1.1430 dollars.
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