Stock markets across Asia and Europe plunged Thursday in reaction to the U.S. central bank’s gloomy outlook on the world’s largest economy.

Japan’s Nikkei index closed two percent lower, while the Hang Seng index in Hong Kong plummeted nearly five percent at the closing bell. Markets in Seoul, Sydney and Shanghai had also posted losses of at least two percent on Thursday.

Shares on Europe’s key markets are all at least three percent lower in mid-morning trading.

The Federal Reserve announced a measure Wednesday to buy long-term Treasury bonds and sell short-term bonds as a means of stimulating the slumping U.S. economy.

But the Reserve warned the economy continued to face “significant downside risks” to the economic outlook, including high unemployment and a depressed housing market.

U.S. stock markets fell in reaction to the Fed’s dire warning, with the S&P 500 losing as much as five percent, and the Dow Jones and NASDAQ both falling at least two percent or above.