Global Markets Sink as Warsh's Hawkish Comments Fuel Rate Hike Expectations
Global markets declined at the start of the week due to rising expectations for another US interest rate hike and escalating tensions in the Middle East.
Federal Reserve Chair Kevin Warsh's hawkish remarks at the Jackson Hole Economic Symposium reinforced concerns over inflation, with money markets increasing the probability of a Fed rate hike in September to around 60%.
The US two-year Treasury yield rose 12 basis points on August 28 before stabilizing at 4.33%, while the benchmark 10-year Treasury yield climbed five basis points to 4.73%
Tensions with Iran intensified after a US attack on Larak Island, adding to selling pressure across global markets and sending oil prices sharply higher. Brent crude for December delivery surged 5.6% to as high as $90.95 a barrel.