Fed signals trigger world stocks, bonds sell-off

Stock markets were deep in the red and some key government bond yields climbed to their highest in years on Thursday after the Federal Reserve signalled the possibility of faster-than-expected U.S. rate hikes and stimulus withdrawal.

"There is a risk that the Fed might fall into the trap of making policy errors because they do have to perhaps hike interest rates faster than expected, but given the timing of their exit from quantitative easing, it could coincide with a slowdown in the economic cycle and also a decline in inflation on base effects," said Casanova.

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