Asia markets fall after Fed holds rates, but signals higher rates for longer

Asia-Pacific markets fell across the region after the U.S. Federal Reserve held its benchmark policy rate, but said it will raise interest rates one more time this year, according to the central bank’s projections. Projections showed the central bank expects to hike rates to a median of 5.6% by the end of 2023, up from the current range between 5.25% and 5.5%. The rate-setting Federal Open Market Committee projected two rate cuts in 2024, which is two fewer than its forecast in June. That would put the funds rate around 5.1%. In Australia, the S&P/ASX 200 fell 1.25%, on pace to hit its lowest level this month. Japan’s Nikkei 225 is also slipped 1.15% as the Bank of Japan starts its two-day monetary policy meeting, with the Topix down 0.78%. South Korea’s Kospi was 1.3% lower, leading losses in Asia, and the Kosdaq shed 1.84%. Hong Kong’s Hang Seng index was down 1.3%, while mainland Chinese markets are also down, with the CSI 300 losing 0.55%. Overnight in the U.S., all three major indexes lost ground as investors digested the Fed’s moves, with the Nasdaq Composite leading losses and down 1.5%, dragged by names like Microsoft, Nvidia and Google-parent Alphabet. The S&P 500 dropped 0.94% , while the Dow Jones Industrial Average lost 0.22%.