OVERNIGHT

We said this was the week of the Fed and it started Monday with St. Louis Fed President James Bullard telling investors that their increasing expectations of a rate hike were "probably good," and warned a "relatively tight U.S. labor market might put upward pressure on inflation," Reuters reported.

In what could be described as a good cop-bad cop role, San Francisco President John Williams noted:
"Over the rest of the year two or maybe three rate increases, maybe one or two more (than that) next year so maybe three or four next year - I think that's still about right."

Of course what these spokespeople are doing is preparing investors for the hikes to avoid a mini-meltdown like what occurred the last time. It will be interesting to see if it works. Meanwhile, it was a downward mood for most Asian markets. CNBC reported.

Asian markets traded broadly lower on Tuesday, led by declines in Japan and China, as investors await further cues from the U.S. Federal Reserve ahead of its monetary policy meeting in June.

The Nikkei 225 was down 0.69 percent amid pressure from fresh strength in the yen against the dollar. Across the Korean Strait, theKospi was off by 0.58 percent. In Hong Kong, the Hang Seng index was down 0.16 percent. Chinese mainland markets fell, with the Shanghai composite down 0.86 percent, while the Shenzhen composite was off by 1.05 percent.

Australia's S&P/ASX 200 dropped 0.13 percent, weighed by a 0.66 percent decline in the energy sub-index. The dollar rebounded against the yen after Monday suffering nearly 1% losses trading in the 109.40 range off from its previous low of 109.12. Last Friday it changed hands at a three-week high of 110.59. It appeared as if investor blew off the Fed's hawkish warnings as investors pushed the yen up in what some called risk aversion trades.