Markets have now fully priced in a quarter-point rate cut from the Fed in September, with a total easing of 68 basis points expected by the end of the year
Trading was thinned in Asia with Australia, China, Hong Kong and Taiwan out for public holidays, but MSCI's broadest index of Asia-Pacific shares outside Japan still slumped 0.46 per cent
Late last week, partly in response to some policymakers' comments, global bonds retraced a rally that had followed an encouraging fall in US CPI data
Chinese shares see earlier gains, with bluechip stocks rising 1 per cent and Hong Kong's Hang Seng index increasing 1.2 per cent
Crude oil wallowed near two-month lows amid signs of easing supply pressure and continued hopes for a Middle East ceasefire
Trading was thinned in Asia with Japan out for a holiday, though markets in mainland China got off to an upbeat start after returning from an extended break
Oil prices, however, hardly reacted to the news, as traders had largely priced in a retaliatory attack from Iran that would likely further disrupt supply chains
Markets widely expect the Fed to raise its benchmark overnight interest rate by 75 basis points (bps) to a range of 3.75% to 4.00%, the fourth such increase in a row
Japan's Nikkei edged up 0.16%, the S&P/ASX 200 index rose 0.2%, while South Korean stocks added 0.1%
Asian shares rallied on Wednesday as fears of a Russian invasion of the Ukraine this week dissipated, after Moscow indicated it was returning some troops to base, thereby relieving the investors.
Geopolitics also remained a worry as the White House warned Russia could invade Ukraine any day and French President Emmanuel Macron prepared for a trip to Moscow
The Federal Reserve has indicated it is likely to raise U.S. interest rates in March, as has been widely expected
Adding to the caution was concerns about a possible Russian attack on Ukraine with the U.S. State Department pulling out family members of its embassy staff in Kyiv.
Asian shares flatlined on a slow as the spread of Omicron clouded what is the last trading day of the year for many exchanges, while oil was close to finishing 2021 with gains of more than 50%
Asian stock markets and the US dollar struggled for traction on Friday after a rush of central bank meetings underlined the growing threat posed by a spike in global inflation
China Evergrande Group on Tuesday missed its third round of bond coupon payments in three weeks
Oil prices extended their bull run, with gains across the energy complex stoking inflation concerns.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.31 per cent in morning trading
Chinese blue chips shed 4.4% to their lowest since December
Asian shares held firm on Thursday after Federal Reserve Chair Jerome Powell said the US economy was 'still a ways off' from levels the central bank wanted to see before tapering its monetary support