In its first policy meeting since the induction of new chief Jerome Powell, the U.S. Federal Reserve met analysts’ expectations on Wednesday by raising interest rates and predicting at least two more interest rate hikes before the end of the year. The central bank also hinted that inflation should finally head higher after hovering for years below its 2 percent target rate. The overnight interest rate was raised one quarter of a percentage point, to between 1.50 percent and 1.75 percent, as expected.

“The economic outlook has strengthened in recent months,” the Fed said about its decision.

U.S. markets reacted with a shudder and shake, initially heading higher before closing lower for the day. Asian markets followed suit, trading mixed on Thursday. As of 1:20 p.m. HK/SIN, Japan’s Nikkei 225 was up 0.57 percent while Hong Kong’s Hang Seng Index was down 0.52 percent. The Shanghai Composite was unchanged, but the ASX 200 was down 0.22 percent.

Currency Movements

The dollar struggled following the Fed’s announcement, falling against most of its primary trading partners during Thursday’s Asian session. The dollar slipped 0.24 percent against the yen to trade at 105.79, and it declined against the euro to trade at $1.2354. The British pound also gained against the dollar after rising close to 1 percent on Wednesday after strong wage data out of the U.K. firmed expectations of a May interest rate hike.

Also pressuring the dollar was continuing concern about a potential trade war between the U.S. and China. U.S. Trade Representative Robert Lighthizer announced on Wednesday that the proposed tariffs would impact China’s technology sector and limited Chinese investments in the United States. Analysts are concerned that retaliation from China could spur a snowball effect that will be hard to stop.