- Stocks fell Friday but bonds climbed, as inflation, rising borrowing costs, and China's Covid lockdowns dampened investor optimism.
- The technology sector dragged down the Asia-Pacific share index, which fell over 1% after declines in Hong Kong and China and mixed results in Japan. The regional losses were less than the S&P 500 index's 3.5% drop and the Nasdaq 100 index's 5% drop on Thursday. Futures for US stocks fell.
- Australian debt and treasuries continued to fall, pushing the US 10-yr rate beyond 3%. A dollar index rose to a 2-yr high. The yuan has weakened.
- Following the Fed's announcement on Wednesday, risk aversion swept away a relief rally. The Fed hiked interest rates for the first time since 2000, despite opposition to large hikes.
- Traders reduced rate-hike bets as a result, but mood remains vulnerable to dwindling liquidity, as evidenced by severe losses in speculative assets like bitcoin. The conflict in Ukraine and China's communicable disease pandemic are also causing concern.
