Asian Stocks Fall after US Fed Hikes Benchmark Rate by 50bps, Signals More to Come

Asian stock markets fell as the U.S. Federal Reserve hiked its benchmark interest rate by 50 basis points to the highest level in 15 years, signaling that interest rates will rise faster than expected next year. The Hang Seng index fell 1.8%, leading to losses in the region.

The Shanghai Composite in mainland China dipped 0.38% as of 9.25 a.m. (Thai time) as investors digested a slew of economic statistics issued by the country. Retail sales fell 5.9% year on year in November, falling far short of expectations in a Reuters poll. China’s annual Central Economic Work Conference is expected to take place behind closed doors from Thursday to Friday.

The S&P/ASX 200 lost 0.40%. In Japan, the Nikkei 225 fell 0.17%. South Korea’s Kospi dipped 0.92% as well.

Overnight in the U.S., stocks fell as Fed Chair Jerome Powell said more data was required before the central bank would make a significant shift in its stance on inflation, ending a two-day winning streak for the S&P 500.

He also stated that the central bank still has “ways to go” in its fight against inflation. Rates are expected to end next year at 5.1%, a higher level than originally predicted and considerably beyond market expectations.