The Tel Aviv Stock Exchange was down more than two percent, Shanghai plummeted almost 5% while Tokyo and Hong Kong both shed around 4%, as investors fretted about surging interest rates and the ongoing US-China trade war.
But it amounts to good news for the long-term direction of the economy. That comes after a big tax cut enacted last December.
The IMF chief acknowledged, though, that recent Fed rate increases had been a headache for many emerging economies as capital outflows continued and local currencies kept tumbling.
US interest rates have been on a steady march higher for two years. But Trump has forged ahead, repeatedly criticizing the modest interest rate hikes the central bank has delivered in recent months out of concern that the changes will undermine the roaring economy he is presiding over - and giving himself a new foil to help motivate Republican voters ahead of the midterms. There are two Trump Fed picks with Wall Street experience, Randal Quarles, the vice chairman of supervision, and Powell. They have reached out to the Fed leader to ensure there hasn't been improper political interference.
"No I think the Fed is making a mistake", he said.
"I stood on the floor in the crash of '87, so this is nothing", Benedict said.
"And we just try to do the right thing for the medium and longer term for the country", said Mr Powell. "We don't let other things distract us".
European stock markets fell Thursday as economic strains and a drastic downturn in Asia spooked investors, but Wall Street managed to put a halt on its sharp fall seen the previous day, the worst since February. The Fed under his hand-picked chairman Powell has been gradually raising rates as the economy has strengthened to prevent a run-up in inflation.
During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the American economy was robust.
For example, experts say that the roots of the 2008 financial crisis date back to 2000, when the federal agency began slashing interest rates. Goldman Sachs sees the Bank of Israel raising the interest rate in the first quarter of 2019 and not before because inflation in Israel in 2018 is expected to be only 0.9%, below the government's annual target range of 1%-3%.
The market's reaction did not go unnoticed at the White House. "That doesn't seem especially surprising". He was persuaded by Treasury Secretary Steven Mnuchin that Powell, who was already a Fed governor, would be a force for stability.
Kinahan said investors want to know if Corporate America is anxious about the Trump administration's tariffs on Chinese imports and if it sees signs of slower economic growth.
The US central bank once again is on the firing line following President Donald Trump's unprecedented attacks but is likely to shrug it off and focus on economic data. "The Fed has gone insane", Trump said. "Where is the inflation that they are fighting?"
Fed spokeswoman Michelle Smith declined to comment on Trump's remarks.
But for all the stock market palpitations and risks to particular interest-rate sensitive industries, the message to take from the recent rise in interest rates is an unambiguously good one: This expansion may have some life in it yet. Blame the Fed instead.
Fed named Powell to lead the central bank but can only fire him for cause. While he was generally upbeat about the U.S. economy, predicting that the good news could continue "effectively indefinitely", when asked on October 3, 2018, what keeps him up at night, Powell said, "Basically everything".