Markets fall as investors get “first whiff” of tighter Fed policy

Markets fell on Friday.

The S&P 500 fell 1.3 percent, the STOXX Europe 600 tumbled 1.6 percent and the Nikkei 225 fell 0.2 percent.

The Bank of Japan on Friday announced that it would maintain its current monetary policy, adding that it “will not hesitate to take additional easing measures if necessary”.

However, most investors were more focused on the Federal Reserve’s policy after it signalled on Wednesday that it had added two rate hikes to its 2023 forecast.

“This week’s first whiff of an eventual change in Fed policy was a reminder that emergency monetary conditions and the free-money era will ultimately end,” strategists at MRB Partners wrote in a note.