Markets rallied Thursday after the US Federal Reserve played down chances of a huge interest rate hike in the near future, while oil extended gains as the European Union moved to ban imports from Russia. US central bank officials announced an expected half-point lift in borrowing costs — the biggest since 2000 — as part of its battle to rein in inflation, while unveiling a timetable to offload its vast bond holdings. However, traders were given some much-needed cheer when Fed boss Jerome Powell said a 75 basis-point rise, which had been flagged by many observers, was “not something the committee is actively considering”. While he flagged more 50-point hikes to come, the news fuelled a rally on Wall Street, where all three main indexes piled on around 3pc thanks to a surge in tech firms, which are most susceptible to higher rates. “This was a reflection of relief, as investors came into the meeting fearful that the committee would be overly aggressive in tightening monetary policy,” said Clara Cheong of JP Morgan Asset Management. She added that if inflation began showing signs of slowing, it could allow the Fed to be less aggressive as it treads a fine line between containing prices and nurturing the post-pandemic economic recovery. “It remains to be seen if the Fed can pull off this fine balancing act and orchestrate a soft landing, but for now we believe that the US economy is in a strong enough position to weather higher rates,” Cheong said. “There is still, however, a risk that an overly aggressive approach can run the risk of tipping the economy into a mild recession in 2023.” The gains in New York filtered through to Asia, where while Hong Kong, Sydney, Taipei, Mumbai, Manila, Bangkok and Wellington rose. Singapore dipped. Shanghai advanced after returning from a long break with traders seemingly unmoved by data showing activity in China’s services sector fell to the lowest level since the outset of the pandemic. The news reinforced the view that China’s strict zero-Covid measures were hammering the world’s number two economy. London, Paris and Frankfurt soared at the open.