Rapid tightening tension in global markets

The tightening messages from the Fed in global markets caused negative reactions.

U.S. stocks wiped out gains, bond yields and the dollar rose as Fed Chairman Jerome Powell spoke at the 55-minute press conference. The S&P 500 index fell after recovering more than 2 percent earlier in the day, while the two-year Treasury yield posted its highest daily gain since March 2020.

The US 10-year bond yield also closed at 1.8637 percent, with an increase of 9 basis points on the decision day. The selling pressure on US bonds has had an impact globally, including in New Zealand and Australia.

The sales seen in the US indices are also reflected in the US and European futures indices and Asian markets this morning. The daily decline in the Japanese Nikkei 225 index exceeded 3 percent, while the Chinese CSI 300 plunged 20 percent from its February peak to a bear market. The MSCI Asia Pacific Index fell 2.5 percent.

Dollar Index tested a one-month high at 1.183.