Most Asian markets slipped on Tuesday with investors contemplating the prospect of rising US borrowing costs as inflation spikes, while US lawmakers’ struggle to raise the debt ceiling is also agitating nerves on trading floors. Fears over the possible collapse of troubled Chinese developer Evergrande have abated for now, however, though developments on the crisis are being closely followed. With the US economy back on track — and several Federal Reserve officials saying their goals of high inflation and tackling unemployment are close to being met — the US central bank is expected to begin tapering its ultra-loose monetary policy within months. The policy committee essentially signalled such a move at its meeting last week, while a closely watched guide to its interest rate plans suggested a rate hike could even come before the end of next year. “Central bankers have set out how they want to ‘normalize’ monetary policy for some time. That process could start soon,” Chris Iggo, AXA Investment manager said. “The realisation of this has the potential to provoke some volatility in rates and equities.” The Dow on Wall Street edged up but the S&P and Nasdaq fell into the red, with tech firms more susceptible to higher interest rates. And the selling filtered through to Asia, where Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei and Manila followed suit. However, Hong Kong piled on more than one percent, having taken a battering in recent weeks from China’s crackdown on a range of industries — particularly tech firms and Macau-based casinos — and the Evergrande crisis. Shanghai eked out a gain. Initial fears that the collapse of the embattled firm could spill into the global economy have eased but there are still fears that if the issue is not handled properly the Chinese property sector, which accounts for a huge part of the economy, could take a massive hit. The People’s Bank of China on Monday said it would ensure a “healthy property market” and protect buyers’ rights, as it looks to temper anger among investors about Evergrande failing to complete their properties, despite taking their money. The central bank’s comments come after a tightening of rules around the real estate sector by Beijing strangled firms’ ability to invest and construct buildings, a major reason for Evergrande’s woes. “There may be fine-tuning of policies, even though a systemic relaxation of property curbs is unlikely,” Zhong Linnan, of GF Securities, said in a report. Adding to the sense of unease among investors is the drawn-out debt limit saga in Washington, where Republicans have blocked a Democrat move to raise the US borrowing limit, meaning the government will likely run out of cash at the end of the week. But more worryingly, the country could default on its debt obligations next month, which most observers say would spark a massive financial crisis, with Republicans saying they refuse to pay for Democrats’ spending plans. Several top officials including Treasury Secretary Janet Yellen and Fed chief Jerome Powell have urged politicians to step back from the brink and lift the limit. The brewing crisis comes as Democrats fight to pass President Joe Biden’s multi-trillion-dollar infrastructure and social spending bills, with party infighting fueling concerns that the president’s agenda could end up dead in the water.