Warsh Sparks Rate Hike Bets as Asian Stocks Plummet
Asian stocks fell Monday following hawkish comments from Federal Reserve boss Kevin Warsh, who left investors believing that a US interest rate hike is imminent.
In his highly anticipated speech at the Jackson Hole symposium of central bankers and economists in Wyoming, Warsh stated that 'we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.'
He described the current 3.7 percent inflation rate as 'concerning' and said he would be 'hard-pressed' to describe financial conditions as 'restrictive', hinting that rate hikes could be on the horizon.
However, Warsh stopped short of saying he would support a hike, adding 'I stand here today committed to a discipline, not to a decision.'
The US-Iran conflict, which has pushed oil prices higher, also weighed on stocks. The attack prompted Tehran to retaliate by hitting US military targets in Jordan.