Fed chief’s inflation warning sends Wall Street lower

The leading US stock market indices initially held fairly steady after the announcement that the US Federal Reserve would raise interest rates by a quarter of a percentage point.

But when Kevin Warsh repeatedly pointed out during the press conference after the interest rate announcement that inflation is too high, prices began to fall, CNBC reports.

Bank stocks such as Bank of America and Wells Fargo fell 2.7 and 3.0 percent, respectively, on concerns that higher interest rates are dampening lending and economic growth.

The Dow Jones industrial average fell 1.2 percent, the broad S&P 500 index fell 0.5 percent, while the tech-heavy Nasdaq Composite index closed unchanged.