Fed Hikes Rates, Warns of Elevated Inflation Risks

The Federal Reserve delivered its first rate hike in more than three years, raising the overnight funds rate by a quarter point to a 3.75%, 4% target range.

Chair Kevin Warsh stressed that inflation risks remain elevated, saying 'inflation is too high, and has been for too long.'

The move was widely expected, but stocks initially absorbed the news before selling off during Warsh's press conference.

Banks such as Bank of America and Wells Fargo fell about 3%, while American Express and Goldman Sachs were also lower on concerns that higher rates could slow lending and economic activity.