look news india
The US central bank ‘Federal Reserve’ kept interest rates unchanged for the fifth consecutive time in its policy meeting. 3.50% to 3.75% Has been maintained at the limit of. However, Fed Chairman Kevin Wersh’s tough comments and warning of a long fight against inflation completely spoiled the mood in the US markets.
Immediately after the Fed’s decision, there was an all-out selling environment on Wall Street, due to which the Dow Jones Industrial Average recorded a huge fall of more than 1100 points. This was the worst one-day performance for the US market since April 2025.
Wall Street meltdown: Dow Jones and Nasdaq collapse
Major US indices closed in the red as the Federal Reserve kept its stance on interest rates tight:
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Dow Jones: It closed down more than 1,100 points (2.19%).
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S&P 500: Closed with a weakness of 1.5%.
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Nasdaq Composite (Nasdaq): It fell 1.7%, while the Nasdaq 100 fell more than 2%, entering technical correction territory.
30 year bond yield reaches highest level since 2007
After the monetary policy of the Fed, a tremendous boom was seen in the American bond market. Bond yields rise on fears interest rates will remain high for a longer period:
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10 year US bond yield: jumping once again 4.7% But reached.
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30 year US bond yield: by increasing 5.21% Which is the highest level since 2007.
Differences deepened in policy meeting: 3 members raised demand to increase rates
This time there was no consensus within the Fed’s Open Market Committee (FOMC). 9 members supported keeping the rates unchanged, while 3 prominent members dissented on the decision:
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lorry logan (President, Dallas Fed)
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Neel Kashkari (President, Minneapolis Fed)
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beth hammack (President, Cleveland Fed)
These three officials argued that since inflation in America has remained above the fixed target of 2% for more than the last 5 years, there is a strong need for further increase in interest rates to control it.
Fed Chairman Kevin Warsh’s statement: ‘There is no magical solution, it will be a long fight’
Announcing the policy, Fed Chairman Kevin Warsh made it clear that controlling inflation will not be so easy.
Key points of Kevin Warsh:
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“There is an environment of uncertainty in the market and it would be wrong to make any hasty predictions.”
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“Our fight against inflation will be long and difficult. There is no magic solution.”
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“Things will not get better in 1-2 days or weeks. It will take more time to bring inflation down to the 2% target.”
Condition of the economy: Growth strong, but bottlenecks in supply chain
The Fed said in its official statement that despite the ongoing tension in the Middle East, the growth rate of the US economy remains strong. The jobs figures and productivity in the country are positive. However, prices in energy and other essential sectors remain high due to disruptions in global supply chains, posing a challenge in controlling inflation.