US stocks fall as Fed lowers growth forecast

Markets were mixed on Wednesday.

The S&P 500 tumbled 1.5 percent and the Nikkei 225 fell 0.6 percent.

However, the STOXX Europe 600 rose 0.3 percent, with the FTSE MIB jumping 1.6 percent after the European Commission reached a deal with Italy over its 2019 budget, avoiding disciplinary steps against it.

US stocks fell after the Federal Reserve proceeded with its fourth rate hike of the year. However, its policy statement noted that it may be less aggressive in raising rates next year.

“The big takeaway for markets is that the Fed lowered its growth and inflation forecasts” for 2019 and beyond, said Matthews Bartolini, head of SPDR Americas research at State Street Global Advisors.

Peter Berezin, senior vice president of global investment strategy at BCA research, said that the Fed's statement is “dovish” but it still appears set to “take monetary policy into restrictive territory”, where “usually you get a recession”.