Stocks slide as US central bank signals slower pace of rate cuts

US share prices slumped after the central bank cut interest rates for the third time in a row but its economic projections signalled a slower pace of cuts next year.
In a widely expected move, the Federal Reserve set its key lending rate in a target range of 4.25% to 4.5%.
That is down a full percentage point since September, when the bank started lowering borrowing costs, citing progress stabilising prices and a desire to head off economic weakening.
Reports since then indicate that the number of jobs being created has been more resilient than expected, while price rises have continued to bubble.
Stocks in the US fell sharply as Federal Reserve chairman Jerome Powell warned the situation would likely result in fewer rate cuts than expected next year.
“We are in a new phase of the process,” he said at a press conference.
“From this point forward, it’s appropriate to move cautiously and look for progress on inflation.”
The Dow Jones Industrial Average closed 2.58% lower, suffering its 10th session of declines in a row and marking its longest streak of daily losses since 1974.
The S&P 500 lost almost 3% and the Nasdaq Composite fell 3.6%.
In morning trade in Asia on Thursday, Japan’s Nikkei 225 was around 1.2% lower, while the Hang Seng in Hong Kong was down by 1.1%.
Inflation, which measures the pace of price increases, has proven stubborn in recent months, ticking up to 2.7% in the US in November.
Analysts have also warned that policies backed by president-elect Donald Trump, including plans for tax cuts and widespread import tariffs, could put upward pressure on prices.
Analysts say lowering borrowing costs risks adding to that pressure by making it easier to borrow and encouraging businesses and households to take on credit to spend.
If demand rises, higher prices typically follow.
Mr Powell defended the cut on Wednesday, pointing to cooling in the job market over the last two years.
But he conceded that the move was a “closer call” on this occasion and acknowledged there is some uncertainty as the White House changes hands.
Olu Sonola, head of US economic research at Fitch Ratings, said it felt like the Fed was signalling a “pause” to cuts as questions about White House policies make it more unsure about the path ahead.
“Growth is still good, the labour market is still healthy, but inflationary storms are gathering,” he said.