Rising U.S. Treasury yields, KOSPI collapses below 2,400 during intraday trading
Jerome Powell, Chairman of the Federal Reserve System (Fed), poured cold water on the market’s ‘interest rate cut expectations’ by leaving open the possibility of an interest rate hike. The global financial market also fluctuated, with KOSPI collapsing below the 2,400 mark during the day due to Powell’s ‘hawkish remarks’ and worsening demand for US Treasury bonds.
Chairman Powell said at a conference hosted by the International Monetary Fund (IMF) on the 9th (local time), “We are committed to a sufficiently restrictive monetary policy stance to lower the inflation rate to the 2% range, but we are not confident that we have achieved that stance yet.” said. He then said that there is a long way to go until the inflation rate is in the 2% range and hinted at the possibility of further tightening, saying, “If an additional increase is necessary, we will not hesitate.”
Since the Federal Open Market Committee (FOMC) froze the benchmark interest rate on the 1st, the market has been raising expectations that the Fed will not only end raising interest rates, but will also accelerate the pivot point to start lowering interest rates. Reflecting this, the Nasdaq index, centered on technology stocks, recently rose for nine consecutive trading days in the New York stock market, and U.S. Treasury yields plummeted.
However, as Chairman Powell indicated on the 9th that the card of additional tightening was not gone and weakening demand was confirmed as a result of the U.S. Treasury’s Treasury bond bidding, Treasury yields soared. The Standard & Poor’s (S&P) 500 index fell 0.81% from the previous point, and the Nasdaq index ended its continuous rise by 0.94% from the previous point. On the 10th, KOSPI finished trading at 2409.66, down 17.42 points (0.72%) from the previous day, barely maintaining the 2400 mark. Due to the complete ban on short selling that was suddenly implemented on the 6th, it rose to the 2,500 level, but lost 92.71 points in 4 days. Following Japan’s Nikkei (-0.24%), Hong Kong’s Hang Seng Index fell around 1.5%, showing that stock markets across Asia were shaking.
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.