BEIJING (AP) — Asian stock markets followed Wall Street on Thursday after the Federal Reserve raised interest rates again sharply to stem galloping inflation and raised its outlook for further growth.

Shanghai, Tokyo, Hong Kong and Sydney refused. Oil prices rose.

Wall Street’s benchmark S&P 500 index fell 1.7% to its lowest level in two months on Wednesday after the Fed raised its benchmark lending rate by 0.75 percentage point, triple the usual margin. The Fed said it expects the rate to be a full percentage point higher by the end of the year than it was three months ago.

“The Fed still managed to beat the markets,” Anna Stupnitskaya of Fidelity International said in a report. “Economic strength and a hot labor market point to a limited trade-off — at least for now — between growth and inflation.”

The Shanghai Composite lost less than 0.1% to 3,115.94, while Tokyo’s Nikkei 225 fell 0.9% to 27,060.89. Hong Kong’s Hang Seng index fell 1.9% to 18,094.62.

Seoul’s Kospi fell 1.4% to 2,315.24. New Zealand rose 0.1%, while Southeast Asian markets declined.

The Fed and central banks in Europe and Asia have raised interest rates this year to slow economic growth and cool inflation, which has hit a multi-decade high.

Traders fear they could derail global economic growth. Fed officials acknowledge the possibility of such aggressive rate hikes leading to a recession, but say inflation needs to be kept under control. They point to a relatively strong U.S. labor market as evidence that the economy can tolerate higher borrowing costs.

The yield on the 2-year Treasury note, or the difference between the market price and the payout if held to maturity, rose to 4.02% from 3.97% late Tuesday. It was trading at its highest level since 2007.

The yield on the 10-year Treasury note, which influences mortgage rates, fell to 3.52% from 3.56% late Tuesday.

The S&P 500 fell to 3,789.93. The Dow fell 1.7% to 30,183.78, while the Nasdaq Composite lost 1.8% to 11,220.19.

Wall Street’s major indexes are heading for their fifth weekly loss in the past six weeks.

Fed Chairman Jerome Powell has emphasized his determination to raise rates high enough to slow the economy and return inflation to the central bank’s 2% target. Powell said the Fed was just beginning to reach that level with the latest increase.

The central bank’s latest rate hike raised its base rate, which affects many consumer and business loansto a range of 3% to 3.25%, the highest level in 14 years, and increased from zero at the beginning of the year.

The Fed said the key rate could be raised by the end of the year to around 4.4%, a full point higher than it had expected in June.

Consumer prices in the US rose by 8.3% in August. That was below July’s peak of 9.1%, but core inflation, which strips out volatile food and energy prices to give a clearer picture of the trend, rose to 0.6% from the previous month, compared with a rise in July by 0.3%.

The governors of the central banks of Japan, Great Britain, Switzerland and Norway are due to announce whether they will also raise rates again. Sweden surprised economists this week a full-fledged hike.

The global economy has also been hit by Russia’s invasion of Ukraine, which has pushed up the prices of oil, wheat and other commodities.

In energy markets, benchmark US crude rose 19 cents to $83.13 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1 to $82.94 on Wednesday. The price of Brent oil, the price basis for international oil trading, rose by 26 cents to 90.09 dollars in London. It lost 79 cents to $89.83 in the previous session.

The dollar rose to 144.50 yen from 143.46 yen on Wednesday. The euro fell to 98.15 cents from 99.09 cents.

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