Warsh's Hawkish Message Dents Sharemarket

The Australian sharemarket is off to a slow start this week due to changing expectations around US interest rates. Federal Reserve chairman Kevin Warsh's hawkish message has traders recalibrating their views on inflation. After a turbulent week in the bond market that saw yields reach multi-decade highs, Warsh's speech provided some relief by reiterating the Fed's commitment to returning inflation to its 2 per cent target.

Warsh stated that if policymakers fail to meet this goal, they 'have work to do.' The statement is seen as a shift in tone from previous speeches, which had hinted at more aggressive rate hikes. The Fed's pivot has led to a decline in the sharemarket's performance at the start of the week.