SHANGHAI, Jan 6 ― Asian shares fell today, extending a global slump after Federal Reserve meeting minutes pointed to a faster-than-expected rise in US interest rates due to concerns about persistent inflation.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.95 per cent, Australian shares slid 1.53 per cent and Japan's Nikkei stock index fell 2.08 per cent. “There is a risk that the Fed might fall into the trap of making policy errors because they do have to perhaps hike interest rates faster than expected, but given the timing of their exit from quantitative easing, it could coincide with a slowdown in the economic cycle and also a decline in inflation on base effects,” said Carlos Casanova, senior economist for Asia at Union Bancaire Privee in Hong Kong.
Fed officials were uniformly concerned about the pace of price increases that promised to persist, alongside global supply bottlenecks “well into” 2022, the minutes showed.
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