The Federal Reserve has raised its key interest rate for the fourth time this year to reflect the US economy's continued strength, but signalled that it expects to slow its rate hikes next year.
Yesterday's quarter-point increase, to a range of 2.25pc to 2.5pc, lifted the Fed's benchmark rate to its highest point since 2008. It will mean higher borrowing costs for many consumers and businesses.
The Fed's move came despite president Donald Trump's attacks in recent weeks on its rate hikes and on chairman Jerome Powell personally.
The president has complained that the moves are threatening the economy.
Mr Powell said Mr Trump's tweets and statements would have no bearing on the central bank's policymaking.
Yesterday, the Fed said "some" further gradual rate increases were likely. Previously, it referred to "further gradual increases". Its updated forecast projects two rate hikes next year, down from three predicted in September.
US stocks had been sharply higher before the announcement, but began falling afterwards and then accelerated into a plunge during Mr Powell's news conference. The Dow Jones industrial average was down about 400 points soon after the news conference ended. But bond prices rose, sending yields lower.
Some analysts say the Fed may want to pause in its credit-tightening to assess how the economy fares in the coming months. Mr Powell suggested that the Fed might be poised to slow or halt its rate hikes to avoid weakening the economy.