Global equity markets mostly fell on Tuesday as markets awaited a key Federal Reserve decision amid rising expectations for an even tougher rate hike than previously telegraphed. Panic has swept through trading floors since data on Friday showed US consumer prices rising at their fastest pace in decades on surging energy and food costs caused by the Ukraine war and supply chain snarls. Investors are now bracing for the Fed’s interest rate decision on Wednesday as the central bank struggles to walk a fine line between reining in inflation and trying to keep the economy on track. “While there is no doubt that inflation is a considerable challenge for the US at this point, slamming on the brakes too hard risks pushing the economy off its track,” said Tai Hui, chief market strategist for Asia at JP Morgan Asset Management. The inflation reading has raised expectations the US central bank could raise rates by a hefty 75 basis points, higher than its previous 0.5-percentage-point hike — something futures markets now consider likely. “It looks like it’s going to be a 75-basis point hike,” said Quincy Krosby, chief equity strategist of LPL Financial. “We haven’t seen any sign that the Fed wanted to clarify this expectation. In fact, if the Fed stayed with a 50-basis point hike, the market could be disappointed.” Krosby said the Fed’s sharp increase in lending rates will dampen economic growth but the central bank has little choice at this point. “The wake-up call was the CPI on Friday and the preliminary consumer confidence,” she said. “The Fed got the message. It needs to maintain its credibility.” Recession fears sent Wall Street plunging on Monday, with the broad-based S&P 500 stocks index sinking into a bear market, with a drop of more than 20pc from its recent peak. After opening higher on Tuesday, US stocks weakened thereafter. The Dow and S&P 500 finished lower, while the Nasdaq mustered modest gains. London, Paris, Frankfurt and most Asian equities closed in the red. Cryptocurrencies have mirrored the falls in the stock markets, with bitcoin tumbling to an 18-month low under $23,000. Digital currency exchange Coinbase said Tuesday it will lay off 18pc of staff, citing tight economic conditions and an overly rapid expansion.