BEIJING (AP) — Asian stocks followed Wall Street lower Wednesday after a Federal Reserve official’s comments fueled expectations of more aggressive interest U.S. rate hikes and the White House announced more sanctions on Russia.
Market benchmarks in Shanghai, Tokyo, Hong Kong and Sydney retreated.
Wall Street’s S&P 500 index tumbled 1.3% after Fed Governor Lael Brainard said reining in inflation that is at a four-decade high is of “paramount importance.” Brainard said the Fed is set to keep raising rates after its March hike, its first in four years, and might decide at its May meeting to reduce bond holdings “at a rapid pace.”
The White House said Western governments will ban new investment in Russia following evidence its soldiers deliberately killed civilians in Ukraine. The U.S. Treasury said President Vladimir Putin’s government will be blocked from paying debts with dollars from American financial institutions, potentially increasing the risk of a default.
European governments have resisted appeals to boycott Russian gas, Putin’s biggest export earner, due to the possible impact on their economies.
“It’s hard to be particularly optimistic” about the war, “but we live in hope,” said Craig Orlam of Oanda in a report. “And it seems investors do too” despite inflation, rate hikes and high commodity prices.
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