Considering investors largely expected a hawkish pause from U.S. policymakers, the resulting surge in Treasury yields and slide in stocks show that Chair Jay Powell showed a little more talon than they were comfortable with.
U.S. yields pushed even higher in the Asian time zone, while U.S. stock futures pointed lower. Asian shares slumped region-wide - including a 1% slide for Japan's Nikkei - while crude oil extended its retreat from a 10-month peak.
European equities have scope to fall at the open, following their bounce in the previous session. How much a hawkish Fed can spoil the good feeling from yesterday's surprise fall in British inflation will ultimately come down to what the BoE makes of the conflicting forces at play, in a finely balanced call on whether to hike or skip.
But the BoE is actually the last of the European central banks to set policy on Thursday, with the SNB and Riksbank kicking things off, followed shortly by Norges Bank.
This week's central bank bonanza doesn't end in Europe either. The Bank of Japan's policy decision on Friday will be one of the most scrutinised in a string of closely watched recent meetings, after Governor Kazuo Ueda made a startling hawkish shift in a Yomiuri newspaper interview this month, suggesting negative interest rates could be gone by year-end.
Japanese 10-year yields spiked to decade highs in today's session.
Japan's currency, though, is at the mercy of the dollar, sinking to the weakest since the start of November to 148.465 yen, increasing the risk of central bank intervention.
Key developments that could influence markets on Thursday:
-Swiss National Bank (0730 GMT)
-Riksbank (0730 GMT)
-Norges Bank (0800 GMT)
-Bank of England (1100 GMT)
(Editing by Jacqueline Wong)
