On Monday, Asian markets suffered as investors worried that most major central banks are determined to raise interest rates regardless of the risks to growth.
Asian stocks have had a shaky start, while the dollar has remained in demand amid concerns that most major central banks are committed to raising interest rates regardless of the risks to growth.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.4 percent early Monday.
Later this week, Federal Reserve Chair Jerome Powell will address a group of policymakers in Jackson Hole, Wyoming, and the odds are he will not meet investor expectations for a dovish policy shift.
"We expect a reminder that more tightening is needed and that there is still a lot of progress to be made on inflation," said Jan Nevruzi, an analyst at NatWest Markets.
"A bland delivery like that could be underwhelming for markets."
The only question is whether the September hike will be 50 or 75 basis points.
According to a Reuters poll of economists, the Fed will raise interest rates by 50 basis points in September.
China is an exception to the tightening trend, with the central bank expected to cut some key lending rates by 10 to 15 basis points on Monday.
Concerns about China's economy pushed the yuan to a three-month low last week, putting pressure on stocks across the region.
Asia's markets fall, while bonds rise.
South Korea's KOSPI fell 1.1 percent, while Japan's Nikkei fell 1.0 percent, despite a recent sharp reversal in the yen.
S&P 500 futures fell 0.5 percent, while Nasdaq futures fell 0.6 percent. The S& P 500 has repeatedly failed to break through its 200-day moving average of around 4,320, and it finished the week down 1.2 percent.
According to Bank of America's most recent investor survey, most are still bearish, though 88 percent expect lower inflation over time, the highest percentage since the financial crisis.
Following a surprise inflation report, British 10-year yields rose by the most in five years, while German bund yields rose by the most in five years.
Ten-year Treasury yields rose 14 basis points last week to 2.99 percent, while the yield curve remained heavily inverted to reflect the risk of a recession.
The dollar continues to rise.
The general sense of global unease has tended to strengthen the US dollar as a haven, sending it 2.3 percent higher last week to 108.18 on a basket of currencies, its best performance since April 2020.
"If the August flash PMIs for the major economies show a further slowing in economic growth," said Joseph Capurso, head of international economics at CBA, referring to manufacturing surveys due on Tuesday.
The dollar was trading at 137.04 yen, up 2.5 percent from the previous week, while the euro was trading at $1.0030, down 2.2 percent from the previous week.
The minutes of the European Central Bank's most recent policy meeting are due, and they are expected to sound hawkish given the decision to raise interest rates by 50 basis points.
The rise in the dollar has harmed gold, which was trading at $1,744 per ounce. Brent was down $1.02 to $95.70 per barrel, while US crude was down 99 cents to $89.78 per barrel.