HONG KONG (AFP) – Most Asian markets resumed their downward trend yesterday, with traders fearing the Federal Reserve’s determination to beat inflation with higher interest rates will tip the world’s top economy into recession.
After bouncing from their June lows, global equities are once again taking a hiding from worried investors after Fed chief Jerome Powell warned last week the bank would need to tighten policy much more to succeed in its battle against prices.
Wall Street’s three main indexes fell for a third straight day on Tuesday to sit at a one-month low, with healthy data on United States (US) consumer sentiment and job openings indicating the economy remained resilient despite recent rate hikes and four-decade-high inflation.
But analysts said the readings were a case of good news being bad news as they would allow the Fed to stick to its plan of lifting borrowing costs further. Expectations are growing for a third successive three-quarter-point increase next month.
Traders are now awaiting the release of US job-creation figures on Friday for a better idea about the state of the economy.

However, commentators said trying to plot a course through the next few months would be tricky owing to inflation and rate increases as well as other issues such as the Ukraine conflict, geopolitical tensions and China’s COVID-damaged economy.
There were losses in Tokyo, Sydney, Singapore, Wellington, Manila and Bangkok, though Seoul and Jakarta rebounded from early losses. Hong Kong was flat.
London, Paris and Frankfurt all fell after reversing a positive start.
“Having seen such a promising start to August, last week’s speech by… Powell appears to have been the final straw for any sort of hope that we might see another positive month for equity markets,” said CMC Markets analyst Michael Hewson.