LONDON — European markets closed lower on Friday as the prospect of higher for longer interest rates emerged from a slew of central bank decisions this week.
European markets
The pan-European Stoxx 600 index ended the session down 0.3%, taking its losses for the week to 1.57% — its worst performance since mid-August, according to LSEG data. Construction and material stocks dropped 0.9% Friday, while tech stocks added 0.77%.
Global stock markets have endured a rough few days. The U.S. Federal Reserve held interest rates steady on Wednesday but struck a hawkish tone, signaling that a further hike is on the cards later this year and that rates will likely stay elevated for a prolonged period as the central bank looks to exert sustained downward pressure on inflation.
Fed Chairman Jerome Powell reiterated that the top priority is restoring price stability and ensuring that inflation won't rear its head again.
On Thursday, both the Bank of England and Swiss National Bank opted to end their respective runs of interest rate hikes, though both emphasized that there is no room for complacency and that further increases and more sustained higher rates are on the table. Both the Swedish and Norwegian central banks hiked interest rates.
The Bank of Japan on Friday left interest rates unchanged at -0.1%, while maintaining its outlook and yield curve control policy, showing no impetus to end its massive economic stimulus measures.
Shares in Asia-Pacific finished mixed on Friday, paring earlier losses, while U.S. stocks rose despite a bruising week for the major Wall Street indexes.
