Currency traders watch their computer monitors near the screens showing the Korea Composite Stock Price Index , left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, March 8, 2023. Asian shares were mostly lower Wednesday as investors fretted that the Federal Reserve might raise raising interest rates faster if pressure stays high on inflation.
Chinese shares sank after officials in Beijing announced plans for a regulatory shakeup. Hong Kong's Hang Seng tumbled 2.4% to 20,051.25, while the Shanghai Composite slipped less than 0.1% to 3,283.25. Oil prices fell. A Fed meeting later this month is expected to result in another rate hike. When Powell speaks at U.S. Congress again later in the day, traders will watch to see if he reinforces the hawkish rhetoric or tones it down, given the market reaction.
That would be a sharp turnaround after it had just slowed its pace of increases to 0.25 percentage points last month from earlier hikes of 0.50 and 0.75 points. “This is the market coming back to realistic expectations,” said Megan Horneman, chief investment officer at Verdence Capital Advisors."I think it’s going to continue to wash out some of the excesses in the market."