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US investors fretted on Friday over a surprise move by the Federal Reserve that signaled to some the central bank may be retreating from its easy money policy.

The Fed raised the discount rate it charges banks for emergency loans. Despite being a signal the economy is on the right track, it alarmed investors who have relied heavily on near-zero interest rates and have shoveled cheap money into riskier investments like equities and commodities that yield more returns.

Earlier, US consumer prices rose less than expected in January while prices excluding food and energy actually fell, something that has not happened in more than 25 years.

The Labor Department said on Friday that consumer prices edged up 0.2 percent in January while prices excluding food and energy slipped 0.1 percent. That was the first monthly decline since December 1982.

Elsewhere, Asian stocks tumbled on Friday after the US central bank’s unexpected rise in interest rates for emergency bank loans, triggering investor fears that growth could slow in the world’s largest economy.

Asian traders are wondering weather the “exit strategy” from a loose monetary policy could stifle US demand.

“As the dollar strengthens, we see less appetite for riskier assets such as Asian stocks,” said Jit Soon Lim, head of equity research for Southeast Asia for Nomura in Singapore. “We’re bullish on the region’s economic growth, but bearish on risk.”

Markets in China and Taiwan are closed this week for the Lunar New Year. Hong Kong’s Hang Seng stock index led decliners, diving 2.3 percent while Japan’s Nikkei 225 stock average dropped 2.1 percent. South Korea’s Kospi declined 1.7 percent.

Singapore’s stock measure retreated 1.2 percent.

Oil prices slid below $78 a barrel in Asia after the Fed’s rate hike sent the US dollar higher. In currencies, the dollar rose to 91.89 yen from 91.75 yen.



JG, AP