Warsh's Hawkish Tone Sparks Stock Plunge After Fed Rate Hike

The Federal Reserve hiked interest rates and Chair Kevin Warsh struck a hawkish tone on future policy decisions, causing stocks to reverse gains and plummet. The tech-heavy Nasdaq Composite edged down 0.01%, while the S&P 500 fell by 0.44%. The Dow Jones Industrial Average underperformed, plunging 1.21%.

Warsh's comments following the widely expected hike were the clear catalyst that changed the market's trend. He said inflation has been 'too high' for 'too long,' and that the Federal Open Market Committee's 'predominant focus is on the price stability side of our mandate.'

The FOMC statement also noted that 'inflation remains elevated' and that the decision 'will support a timelier return to the Committee's 2 percent goal.' Most officials projected another rate hike by the end of the year.