Global markets weaken as Fed signals further rate tightening

NEW YORK: Global equity markets remained cautious after the US Federal Reserve raised its benchmark interest rate by 25 basis points to 3.75%-4.00%, while signalling that further tightening could be required to bring inflation back towards its target.

Wall Street ended lower following the decision, with the Dow Jones Industrial Average falling 1.21% to 51,461.90 and the S&P 500 declining 0.45% to 7,551.81. The Nasdaq Composite edged 0.01% lower to 25,978.43.

Global markets

Fed Chair Kevin Warsh was reported to have said that the US economy had strengthened, although inflation remained elevated. Policymakers were also reported to have projected one further rate increase this year.

In Europe, the STOXX 600 rose about 0.46% to 637.09, supported by easing oil prices and reduced concerns over inflation.

Asian markets were mostly higher ahead of the Fed decision, with Japan’s Nikkei 225 gaining 0.69%, South Korea’s KOSPI rising 1.37% and Hong Kong’s Hang Seng edging 0.19% higher.

Brent crude prices eased after reports that additional Saudi crude cargoes through Oman were being offered, reducing concerns over Middle Eastern supply disruptions.

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