Sydney's S&P-ASX 200 fell 1.7% to 6,588.10. New Zealand and Southeast Asian markets declined.
The S&P 500 lost 0.8% to 3,757.99. The Dow Jones Industrial Average fell 0.4% to 30,076.68 and the Nasdaq composite slid 1.4% to 11,066.81.
The selling reflects investor fears the Fed and other central banks might be willing to tolerate a deep slowdown in economic activity to get prices under control.
Some point to signs the U.S. economy is cooling as support for the Fed to back off plans for more rate hikes. But chair Jerome Powell said Wednesday that the Fed will keep rates higher for an extended time if needed to get inflation back to its 2% target.
U.S. consumer inflation eased to 8.3% in August from the previous month’s 9.1% peak. But core inflation, which strips out volatile food and energy prices to give a clearer picture of the trend, rose to 0.6% over the previous month, up from July’s 0.3% increase. That indicated pressure for prices to rise still was strong.
The Fed on Wednesday lifted its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%. It released a forecast showing it expects that benchmark rate to be 4.4% by the year’s end, a full point higher than envisioned in June.
Traders also are looking ahead to quarterly financial results from big companies.
In energy markets, benchmark U.S. crude lost 21 cents to $83.28 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 55 cents to $83.49 on Thursday. Brent crude, used to price international oils, declined 28 cents to $89.25 per barrel in London. It rose 63 cents the previous session to $90.46.
The dollar fell to 142.01 yen from 142.49 yen. The euro declined to 98.28 cents from 98.31 cents.