US stock markets slide after Federal Reserve holds key interest rates

The US Federal Reserve has kept its benchmark interest rate at 3.5% to 3.75% for the fifth consecutive meeting. The decision by the Federal Open Market Committee passed in a 9–3 vote, with three officials advocating for an immediate quarter-point increase due to lingering inflation risks.

Federal Reserve Chair Kevin Warsh reaffirmed the central bank's commitment to its 2% inflation target, indicating that further monetary tightening remains possible at the upcoming September meeting when new economic forecasts become available. Warsh noted that raising rates "could well be part of that solution," though he refrained from explicitly committing to a future hike.

Following the announcement, major Wall Street indices closed sharply lower. The Dow Jones Industrial Average fell 2.2 percent, marking its steepest single-day drop since April last year, while the Nasdaq Composite fell 1.7 percent and the S&P 500 dropped 1.5 percent.

Sources: Bloomberg, DR, FAZ, Sweden Herald.