Major stock markets in Asia are also starting to fall at the same time as Fed Gov Lael Brainard’s hard-line remarks.
As of 10:00 a.m. on the 6th, Japan’s Nikkei fell 1.29%, Korea’s KOSPI fell 0.68% and Australia’s ASX fell 1.1%.
This is attributed to the sharp rise in the yield on U.S. government bonds (market interest rates) as Fed Gov Lael Brainard made hawkish remarks related to interest rates.
In a debate hosted by the Federal Reserve Bank of Minneapolis on the 5th (local time), Brainard said that to lower inflation, the Fed will start reducing its balance sheet at a rapid pace shortly after the May meeting and systematically tighten its currency through a certain rate hike.
She added that the Fed is ready to take stronger measures if we think the measures we think are justified in consideration of inflation indicators and inflation expectations. In other words, the government is willing to raise interest rates by 0.5 percentage point.
The mayor reacted immediately to his hard-line remarks. The yield on U.S. government bonds soared. In the New York bond market, the benchmark 10-year U.S. government bond yield soared to 2.567 percent during the day. This is the highest since early May 2019.
As a result, technology stock selling emerged, and NASDAQ plunged 2.26%. In addition to NASDAQ, the three major indexes of the New York Stock Exchange fell all at once, with Dow falling 0.80% and S&P 500 falling 1.26%.
The Asian stock market, which was held following the US stock market, seems to be falling all at once without overcoming the “brainard’s shock.”