Global stock markets and Wall Street futures fell on Thursday after the Federal Reserve signalled that interest rates would be raised soon to cool inflation.
London and Frankfurt started the day lower. Tokyo and Seoul market benchmarks plummeted by an exceptionally large margin of more than 3 percent.
The Federal Reserve said in a statement on Wednesday that it “expects it will soon be appropriate” to raise interest rates. Investors anticipate up to four rises this year, beginning in March. Monthly bond purchases, which lower long-term interest rates by pumping money into the financial system, will be phased down in March, according to the Fed.
“The Fed’s decision would ripple globally, indicating that the era of ultra-low interest rates is ended,” said Francis Lun, CEO of Geo Securities in Hong Kong. “Instead of trying to stimulate the economy, all central banks will begin to battle inflation.”
The FTSE 100 in London was down 0.2 percent at 7,452.31 in early trading, while the DAX in Frankfurt was down 1.5 percent at 15,233.46. The CAC 40 index in Paris declined 1 percent to 6,918.14.
Futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were down 0.5 percent on Wall Street.
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