Major U.S. indices slumped as the Federal Reserve implemented a quarter-point rate hike and signaled that inflation risks remain skewed to the upside, pushing expectations for price stability out to 2029.
The Dow Jones Industrial Average fell more than 400 points in afternoon trading after the Fed's rate hike.
The S&P 500 slumped following the Federal Reserve's decision to raise interest rates.
The tech-heavy Nasdaq Composite also declined after the Fed's hawkish rate hike.
The Federal Reserve unanimously raised interest rates by 25 basis points to a 3.75%–4% range, citing persistent inflation and a robust labor market. Markets reacted sharply to the hawkish stance, with the Dow Jones Industrial Average shedding over 400 points as officials signaled that additional tightening may be necessary to reach the 2% inflation target.
The Fed cited persistent inflation that remains above their 2% target, a robust labor market, and ongoing geopolitical conflict as primary drivers for the unanimous decision to tighten policy.