Global stocks fall after Fed says more U.S. rate hikes likely

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Global stocks sank Thursday after the Federal Reserve added to recession fears by suggesting more U.S. rate hikes are likely to cool inflation.

London, Shanghai, Frankfurt and Hong Kong followed Wall Street lower after the Fed on Wednesday raised its key rate to a 15-year high. Oil prices fell by more than $1 per barrel.

Fed Chair Jerome Powell reinforced expectations of more rate hikes by saying "we have a ways to go." He indicated the level that is high enough to bring down inflation looks higher than it did in September but gave no target. In Asia, the Hang Seng in Hong Kong fell 3.1% to 15,369.72, giving up much of the previous day's gains after the Chinese government failed to confirm a rumor on social media that Beijing might start easing anti-virus controls that have disrupted business.Japanese markets were closed for a holiday.

U.S. consumer prices rose 6.2% over year earlier in September, the same as the previous month. Core inflation, which excludes volatile food and energy prices to make the trend clearer, accelerated to 5.1% from August's 4.9%. Data from payroll processor ADP showed companies added jobs at a faster pace in October than expected.

 

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