- Asian equities sank the most in nearly two weeks after Federal Reserve officials resisted predictions on dramatic interest rate reduction next year.
- The MSCI Asia Pacific Index fell as much as 1.1%, the most since December 5, led by a plunge of about 1% in Hong Kong. US futures rose after the S&P 500 ended a six-day run. The dollar remained steady, but two-year Treasury yields reversed gains gained on Friday, when New York Fed President John Williams led a chorus of officials in saying it's too early to consider decreasing borrowing costs.
- The backlash might derail the 'everything rally,' after traders saw recent Fed signals as a green light to increase bets on rate reduction next year, propelling US and Asian stocks to their highest weekly gains in a month. According to gathered data, swaps traders reduced their bets for cuts in 2024 to just under five from six before the current Fed speech.
- Central bankers from the United States to Europe and Canada have already begun to confront dealers. Raphael Bostic, president of the Atlanta Fed, who votes on monetary policy next year, told reporters that he expects two rate cuts in 2024, but not until the third quarter. Separately, Chicago Fed President Austan Goolsbee said on Sunday that considering rate reduction until authorities are confident inflation is on a downward path to its target is an overstatement. Tiff Macklem, Governor of the Bank of Canada, expressed a similar sentiment.