Market Volatility Expected as Central Banks Signal Rate Hikes

Traders are preparing for a cautious start to the week as US and European policymakers signal that interest rates will likely remain higher for longer, following the annual Jackson Hole symposium. Federal Reserve Chair Jerome Powell indicated that the US could raise rates further if necessary, while European Central Bank President Christine Lagarde pledged to keep borrowing costs high until inflation reaches its goal. The yen weakened to near its lowest level this year, raising questions about potential intervention by Japan. Asian currencies have dropped against the dollar, and the MSCI Asia Pacific Index is on track for its largest monthly decline in almost a year.