Markets mostly fell Thursday on the prospect of US interest rates going higher, and for longer, as officials try to cool the economy and bring decades-high inflation under control.
Months of slowing price rises fuelled hopes the Federal Reserve could soon pause its tightening drive or even cut rates this year, but that optimism was dealt a blow last Friday by data showing the jobs market remains strong.
And key members of the central bank have lined up this week to acknowledge that while there had been progress in the inflation battle, there would be more pain to come before things got easier.
After bank boss Jerome Powell on Tuesday reiterated last week's post-meeting statement that he saw more hikes in the pipeline, several top officials provided further insight Wednesday.
New York Fed chief John Williams said the policy board needed to "attain a sufficiently restrictive stance of policy" and then "maintain that for a few years to make sure we get inflation to two percent", the bank's inflation target.
Governor Christopher Waller added: "It might be a long fight, with interest rates higher for longer than some are currently expecting."
Meanwhile, Minneapolis boss Neel Kashkari warned there was "not yet much evidence, in my judgment, that the rate hikes that we've done so far are having much effect on the labor market".
"We need to bring the labour market into balance, so that tells me we need to do more."
The comments came after a closely watched US jobs report showed more than half a million new posts were created last month, far more than expected.
With the world's top economy still showing resilience despite almost a year of rate hikes and surging prices, observers said traders' hopes for a rate cut this year were fading.
Some are now predicting they could go as high as six percent, almost one percentage point above what is currently being priced in.
"I don't think the Fed will cut within this year," Jun Bei Liu, at Tribeca Investment Partners, told Bloomberg Television.
"The Fed was behind the curve in terms of putting up their interest rate, and they certainly are going to be very slow in cutting the interest rate."
All three main indexes on Wall Street ended lower Wednesday, led by tech firms, and most of Asia followed suit.
Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta were all in the red.
However, Hong Kong and Shanghai rose on bargain-buying following a recent sell-off and hopes about China's post-Covid reopening.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 0.5 percent at 27,479.86 (break)
Hong Kong - Hang Seng Index: UP 0.3 percent at 21,352.30
Shanghai - Composite: UP 0.7 percent at 3,255.56
Dollar/yen: UP at 131.48 yen from 131.42 yen on Wednesday
Euro/dollar: UP at $1.0728 from $1.0716
Pound/dollar: UP at $1.2078 from $1.2071
Euro/pound: UP at 88.82 pence from 88.75 pence
West Texas Intermediate: UP 0.1 percent at $78.55 per barrel
Brent North Sea crude: UP 0.1 percent at $85.20 per barrel
New York - Dow: DOWN 0.6 percent at 33,949.01 (close)
London - FTSE 100: UP 0.3 percent at 7,885.17 (close)
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