Asian shares followed Wall Street and Europe lower on Friday, with markets jittery over the risk that the Federal Reserve and other central banks may end up bringing on recessions to get inflation under control.

Oil prices and U.S. futures edged higher.

China’s move to relax COVID restrictions has raised hopes for an end to massive disruptions from lockdowns and other strict measures to prevent infections. But signs of sharply rising case numbers have raised uncertainty, with some alarmed over the possibility that the pandemic will continue to drag on the economy.

Hong Kong’s Hang Seng was flat, at 19,369.65 while the Shanghai Composite index shed 0.3% to 3,160.67.

Tokyo’s Nikkei 225 lost 1.7% to 27,569.56 after a survey of manufacturers showed a further contraction in output.

The Kospi in Seoul edged 0.2% lower to 2,357.97, while Australia’s S&P/ASX 200 declined 0.3% to 7,180.50.

Shares in Taiwan fell 1.2% and the SET in Bangkok lost 0.2%. Mumbai dropped 1.4%.

On Thursday, the S&P 500 fell 2.5% to 3,895.75, erasing its gains from early in the week. The tech-heavy Nasdaq composite lost 3.2% to 10,810.53 and the Dow gave back 2.2% to 33,202.22.

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The wave of selling came as central banks in Europe raised interest rates a day after the U.S. Federal Reserve hiked its key rate again, emphasizing that interest rates will need to go higher than previously expected in order to tame inflation.

European stocks fell sharply, with Germany’s DAX dropping 3.3%.

Like the Fed, central bank officials in Europe said inflation is not yet corralled and that more rate hikes are coming.

“We are in for a long game,” European Central Bank President Christine Lagarde said at a news conference.

Small company stocks also fell. The Russell 2000 index slid 2.5% to close at 1,774.61.

The Fed raised its short-term interest rate by half a percentage point on Wednesday, its seventh increase this year. Central banks in Europe followed along Thursday, with the European Central Bank, Bank of England and Swiss National Bank each raising their main lending rate by a half-point Thursday.

Although the Fed is slowing the pace of its rate increases, the central bank signaled it expects rates to be higher over the coming few years than it had previously anticipated. That disappointed investors who hoped recent signs that inflation is easing somewhat would persuade the Fed to take some pressure off the brakes it’s applying to the U.S. economy.

The federal funds rate stands at a range of 4.25% to 4.5%, the highest level in 15 years. Fed policymakers forecast that the central bank’s rate will reach a range of 5% to 5.25% by the end of 2023. Their forecast doesn’t call for a rate cut before 2024.

The yield on the two-year Treasury, which closely tracks expectations for Fed moves, rose to 4.24% from 4.21% late Wednesday. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.45% from 3.48%.

The three-month Treasury yield slipped to 4.31%, but remains above that of the 10-year Treasury. That’s known as an inversion and considered a strong warning that the economy could be headed for a recession.

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The central bank has been fighting to lower inflation at the same time that pockets of the economy, including employment and consumer spending, remain strong. That has made it more difficult to rein in high prices on everything from food to clothing.

On Thursday, the government reported that the number of Americans applying for unemployment benefits fell last week, a sign that the labor market remains strong. Meanwhile, another report showed that retail sales fell in November. That pullback followed a sharp rise in spending in October.

In other trading Friday, benchmark U.S. crude oil gained 38 cents to $76.49 a barrel in electronic trading on the New York Mercantile Exchange. It lost $1.17 on Thursday to $76.11 per barrel.

Brent crude, the pricing basis for international trading, added 49 cents to $81.70 per barrel.

The dollar fell to 137.25 Japanese yen from 137.81 yen late Thursday. The euro rose to $1.0651 from $1.0627.