BEIJING — Global stocks and U.S. futures sank Thursday after the Federal Reserve indicated its benchmark interest rate will stay close to zero at least through 2023 but announced no additional stimulus plans.
London and Frankfurt opened lower. Shanghai, Tokyo, Seoul and Hong Kong all retreated.
The Fed said Wednesday it won’t raise interest rates until inflation reaches 2%, which the U.S. central bank’s own projections say won’t happen until late 2023. Chairman Jerome Powell promised the Fed “we will not lose sight” of unemployed Americans but gave no indication of new stimulus.
Markets “hoped for the Fed to put policy money where the mouth is” but “ended up a tad disappointed,” Mizuho Bank said in a report. The Fed was “long on talk and short on action.”
Also Thursday, the Japanese central bank left its interest rates unchanged and gave no sign of possible stimulus plans.
In early trading, the FTSE 100 in London lost 0.7% to 6,038.88 and the DAX in Frankfurt shed 0.7% to 13,159.84. The CAC 40 in Paris lost 0.8% to 5,035.80.
On Wall Street, the future for the benchmark S&P 500 index fell 1.2% and that for the Dow Jones Industrial Average lost 1%.
On Wednesday, the S&P 500 lost 0.5% while the Dow gained 0.1%. The Nasdaq composite fell 1.3%.
In Asia, the Shanghai Composite Index lost 0.4% to 3,270.44 and the Nikkei 225 in Tokyo sank 0.7% to 23,319.37. The Hang Seng in Hong Kong retreated 1.6% to 24,340.85.
The Kospi in Seoul shed 1.2% to 2,406.17 while Sydney’s S&P-ASX 200 declined 1.2% to 5,883.20.
India’s Sensex retreated 0.5% to 39,088.73. New Zealand and Southeast Asia markets all retreated.
Global markets have recovered most of this year’s losses, boosted by central bank infusions of credit into struggling economies and hopes for a