Emerging-market equities and currencies declined as investors weighed the prospect of higher US interest rates following hawkish comments from Federal Reserve Chair Kevin Warsh.

MSCI Inc.’s gauge of developing-market equities fell as much as 1.4%, the most since Aug. 24, with South Korean and Taiwanese indexes leading losses across the region. An index for emerging market currencies slipped 0.1%, on track for its first decline in nine sessions, with the Indonesian rupiah underperforming peers.

The sell-off reflects growing bets that the Federal Reserve may accelerate rate hikes to combat inflation, pressuring capital flows into higher-yielding assets. Investors are closely watching upcoming economic data and central bank communications for further direction.

Bloomberg Markets reported the developments on Aug. 31, 2026, at 5:28 AM UTC.