Global Markets Jitter as Fed's Hawkish Stance Sways Investors

Asian stocks slid while the dollar neared a two-year high after the Fed signaled a more cautious approach to rate cuts next year. The Bank of Japan kept rates steady but faces growing inflationary pressures. Investors are closely watching for future rate hikes as global economic challenges loom.

In a significant shift for global markets, Asian stocks dropped and the dollar soared nearing a two-year high following the U.S. Federal Reserve's announcement of a more restrained approach to rate cuts in the upcoming year. The decision has sparked widespread investor anxiety.

Meanwhile, the Bank of Japan maintained its current interest rates, although continued yen weakness and persistent inflationary pressures suggest that changes might be necessary in the near future. Analysts are now keenly focused on the commentary of BOJ Governor Kazuo Ueda.

The Fed's pivot toward a more hawkish tone has ripple effects across major economies, with concerns mounting over potential inflationary impacts from new U.S. economic policies under the Trump administration. The situation underscores looming global economic challenges.

(With inputs from agencies.)