Fed raises rates while watching subprime auto financing

US crude fell 3.7 percent to settle at $44.73 per barrel and Brent settled at $47.00, down 3.5 percent.

A Washington Post report that U.S. President Donald Trump was under investigation for possible obstruction of justice added to investor worries and undermined their appetite for riskier assets.

That's the third rate hike by the US central bank in the past six months, as the Fed continues to gradually rebuild rates from the near-zero levels that presided over the postfinancial crisis economic recovery.

Asian equities were poised to decline as Treasuries rallied and most US stocks slipped from records after Federal Reserve Chair Janet Yellen suggested weak readings on inflation won't persist as the central bank continued its path of tightening.

Germany's DAX index is up 0.4 percent and Britain's FTSE 100 0.1 percent.

A slide in technology stocks weighed on the Nasdaq and S&P 500 as investors anxious about the pace of economic growth after the rate increase and weaker-than-expected inflation data.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7 percent, led by resource shares. The blue-chip CSI300 index fell 0.2 percent while the Shanghai Composite Index added 0.1 percent.

Around 1.30 p.m., the wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 40.70 points - or 0.42 per cent - to 9,577.45 points.

Following the outbreak of the crisis in 2007 the federal funds rate swirled downwards from 5.25 percent in August 2007 to 0.25 percent in December 2008, in order to stimulate the markets after the ferocious crash. The Fed also announced plans to start gradually paring its bond holdings later this year, which could cause long-term rates to rise. "That is the main reason why the dollar is remaining supported for now", said Manuel Oliveri, currency strategist at Credit Agricole in London.

Data showed that New Zealand's economy grew 0.5 percent in the three months to March, lower than the 0.7 percent growth forecast in a Reuters poll and well below the central bank's forecast for 0.9 percent growth.

Euro zone government bond yields edged up in early trade.

"The Fed's decision to move forward with a second-round increase this year appears to be motivated by both a push from the market with today's rate hike fully priced in, according to Bloomberg, as well as a desire to rebuild the monetary policy tool kit", Piegza said.

FXTM research analyst Lukman Otunuga said: "Financial markets were caught completely off guard during late trading on Wednesday after the Federal Reserve adopted a firmly hawkish stance and even displayed some optimism over economic growth despite mounting concerns over weak inflation".

Oil prices, which are having a negative impact on inflation worldwide, hit six-week lows with global inventories high and doubts over whether the OPEC producers group would be able to implement agreed output cuts.

Brent crude, the worldwide benchmark, was down 12 cents a barrel at $46.88.

Gold considered a safe haven during times of political and financial uncertainty.