How the Fed rate hike could ripple across markets globally

The U.S. Federal Reserve is tightening monetary policy, and the effects are likely to be felt far beyond the American shores.

The Fed on Wednesday raised interest rates for the first time since July 2023 and indicated another hike could follow, as part of its effort aimed at combating inflation that has been stoked by spiraling oil prices, among other factors.

For global markets, a renewed U.S. tightening cycle could mean a stronger dollar, greater pressure on currencies elsewhere and less room for other central banks to ease monetary policy, experts told CNBC.

Higher U.S. rates could also keep global bond yields elevated and weigh on equity valuations and economic growth.

The Fed's hike and signals about another one are putting some upward pressure on the dollar and downward pressure on other currencies, Mark Zandi, chief economist at Moody's Analytics, told CNBC.