Share market declines deepened from the open in Asia on Thursday amid diminishing odds of a soft economic landing after the Federal Reserve hiked interest rates by 75 basis points and signaled further aggressive tightening.
Shares fell in Japan and South Korea while US futures dropped after the S&P 500's slide on Wednesday took it more than 20% below the record high in January. US-listed Chinese stocks slumped almost 6% as sentiment took an additional hit from tensions between Beijing and Taiwan, as well as Russia's escalation of its war with Ukraine.
Treasury two-year yields rose further above 4% to levels last seen in 2007 as investors positioned for further rate hikes while 10-year yields held most of an overnight fall, underscoring market worries of recession.
A dollar gauge traded near a record high while the euro was around the lowest in 20 years. South Korea's won weakened past the 1,400 threshold to the greenback for the first time since 2009.
Jerome Powell vowed that the Fed would crush inflation and said his main message was that officials were "strongly resolved" to bring it down to the 2% goal, adding that "we will keep at it until the job is done." The phrase invoked the title of former Fed chief Paul Volcker's memoir "Keeping at It."
Markets in Asia also have to contend with a host of central bank meetings in the region. Taiwan, Indonesia and the Philippines are all set to raise rates on Thursday.
Governor Haruhiko Kuroda's Bank of Japan is expected buck the trend by maintaining ultra-loose settings, which will keep downward pressure on the yen. Meanwhile, the BOJ's massive bond purchases to cap yields are squashing liquidity for the benchmark 10-year bond.
"With the new rate projections, the Fed is engineering a hard landing - a soft landing is almost out of the question," said Seema Shah, chief global strategist at Principal Global Investors. "Jerome Powell almost channeled his inner Paul Volcker today, talking about the forceful and rapid steps the Fed has taken, and is likely to continue taking, as it attempts to stamp out painful inflation pressures and ward off an even worse scenario later down the line."
Officials forecast that rates would reach 4.4% by the end of this year and 4.6% in 2023, a more hawkish shift in their so-called dot plot than expected. That implies a fourth-straight 75-basis-point hike could be on the table for the next gathering in November - about a week before the US midterm elections.
Elsewhere in markets, oil traded below $83 a barrel, gold fell and bitcoin was under pressure below $19,000.