Fed rate hike expectations intensify after hawkish commentary, driving dollar higher and weakening yen past 160

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Fed rate hike expectations intensify after hawkish commentary, driving dollar higher and weakening yen past 160

⚡ Markets: Increased probability of Fed tightening is bearish for equities (especially tech/growth stocks) and bonds, and bullish for the USD. A yen at 160+ creates high volatility and intervention risk for USDJPY. Higher US yields pressure global borrowing costs.USDJPYDXYUS 10YQQQ

Comments by Federal Reserve official Kevin Warsh continue to fuel market expectations for further interest rate hikes, strengthening the U.S. dollar to near two-week highs. The Japanese yen subsequently weakened past the 160 per dollar threshold, increasing speculation of currency intervention by Japanese authorities, while global bond yields rose.

West MSM 4Financial press 9Regional 8Google Non-West 48 countries

25 sources across the spectrum

Financial pressBloomberg — Yen’s Breach of 160 to Dollar Puts Traders on Intervention Watch: JPY/USD

Financial pressBloomberg — Gold Steadies After Tumbling as Warsh Spurs Fed Rate-Hike Bets

Financial pressBloomberg — Emerging-Market Stocks Fall as Warsh Stokes Fed Rate-Hike Bets

Financial pressFinancial Times — Japan’s bonds and yen under pressure after Kevin Warsh’s Jackson Hole speech

West MSMReuters — Barclays sees two more Fed rate hikes this year after Warsh speech

Financial pressMarketWatch — U.S. stock futures slip as chances of rate hike rise after Warsh’s Jackson Hole comments

West MSMReuters — Indian rupee under pressure from Fed, oil; bonds at risk of further selloff

West MSMReuters — Dollar near two-week high as Warsh boosts rate-hike bets; yen hovers near 160

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