First Thing: US government borrowing costs hit new high as strikes on Iran resume

Federal Reserve votes to hold its key interest rate steady, sending stocks tumbling. Plus: the origins of Coca-Cola may have been found

Good morning. US government borrowing costs have hit their highest level since 2007 after the Federal Reserve voted to hold its key interest rate steady, feeding fears it may not move fast enough to tame a rise in inflation. Kevin Warsh, the central bank's chair, said the Fed would not waver" in its commitment to tackling rising prices.

The decision to leave rates on hold has spooked investors, who are worried about the US economy's ability to absorb a rise inflation, triggered by Donald Trump's war in Iran. US inflation cooled to an annual rate of 3.5% in June after Washington and Tehran agreed a brief ceasefire - but this has since ended. US stocks fell sharply on Wednesday, with the blue chip S&P 500 index closing down 1.5%. The Dow Jones industrial average fell 2.2% and the tech-heavy Nasdaq was down 1.7%.