Global stock markets declined on Monday after the U.S. Federal Reserve signaled it may need to raise interest rates again if inflation remains elevated. The comments renewed investor worries that borrowing costs could stay higher for longer, weighing on equities across major regions.

Traders reacted quickly as benchmark indexes in the United States, Europe, and Asia moved lower. Analysts said the selloff reflected concern that tighter monetary policy could slow economic growth and pressure corporate earnings, especially in sectors sensitive to financing costs.

The Fed's latest message came as officials continue to monitor price pressures and labor market data. While policymakers did not announce an immediate move, the prospect of another hike was enough to unsettle markets already sensitive to signs that inflation is not fully contained.

Economists say the next round of inflation and jobs data will likely shape expectations for the central bank's path. For now, investors appear to be bracing for more volatility as markets adjust to the possibility of a longer period of restrictive policy.

Stock selloff

Global markets fall as Fed signals possible rate hike over inflation