European stock index futures drop 1.5% after hawkish Fed signal

European stock index futures tumbled on Thursday as the U.S. Federal Reserve delivered another super-sized interest rate hike and signaled more increases in its fight against stubbornly high inflation.

The EURO STOXX 50 index futures and Germany’s DAX futures lost 1.5 percent each, as of 0606 GMT, taking cues from Wall Street overnight.

The Fed raised interest rates on Wednesday by 75 basis points for the third straight time and sees its target policy rate at its highest level since 2008, rising to the 4.25 percent-4.50 percent range by the end of this year and ending 2023 at 4.50 percent-4.75 percent.

Meanwhile, European Central Bank board member Isabel Schnabel said interest rates need to keep going up as inflation is still far too high, even as the euro zone faces an economic downturn.

London’s FTSE 100 index futures dropped 0.9 percent ahead of what will likely be the Bank of England’s second large interest rate hike later in the day.