U.S. stocks end lower as Fed lifts interest rates again

December Rate Hike Probabilities

The Fed is expected to lift its key rate on Wednesday from a range of 1.75-2 percent to a still-low 2-2.25 percent.

The S&P 500 slipped 9 points, or 0.3 percent, to 2,905. But excluding volatile food and energy prices, the inflation rate rose 2.0 percent, which hits the Fed's goal.

Powell said that the US economy is in a "particularly bright moment", which would point to continued increases in rates. In a news conference after its meeting, though, Chairman Jerome Powell said the removal of the "accommodative" language did not amount to a policy change.

The announcement "was pretty well telegraphed", said JJ Kinahan, chief market strategist at TD Ameritrade, told AFP.

"Looking ahead, we continue to expect quarterly hikes through end-2019, with the risks tilted to the upside", according to a Goldman Sachs report.

Large banks retreated as 10-year bond yields fell, with JPMorgan Chase, Citigroup and Bank of America all shedding more than one per cent.

The central bank stuck with its previous forecast for a fourth rate increase before year's end and for three more hikes in 2019. Britain's FTSE 100 was down 0.1 percent at 7,500.

Oil price stabilisation has brought some fiscal stability in the region which has about $350bn worth of funding requirements at the government level between 2018 and 2021.

No matter your age, what the Federal Reserve does to interest rates will most likely affect you.

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Officials increased the target for the bank's benchmark rate by 0.25%, to a range of 2%-2.25%.

At their meeting last month, policymakers said another rate hike was likely to be appropriate "soon", all but announcing their intentions to raise rates by another 25 basis points on Wednesday. Meanwhile, the average rate offered by a traditional branch: 0.08 percent.

Trump also said years of near-zero interest rates following the 2008 financial crisis "killed" savers who expected to live off interest payments from banks.

All nine members of the Federal Open Market Committee voted in favor of the decision. That causes those bonds' prices to drop, and the dynamic has caused numerous most popular bond funds to lose money this year.

Emerging market currencies such as the Mexican peso and the South African rand held gains after rising overnight, relieved that the Fed's projected path of rate increases were in line with expectations.

The Fed is working to get things "just right so you don't overheat but you don't cause a recession", he said. But long-term Treasuries rallied late in the session, with the benchmark 10-year note yield ending at 3.048%, down from about 3.10% shortly after the 2 p.m. EDT release of the Fed decision, which was short of the closely watched 52-week peak of 3.127%.

The rise in the dollar helped perk up European stocks as the slide in the value of the euro and pound helps exporters. The contract gained 0.3 percent on Tuesday to close at $72.28.

Given that the most recently quarterly GDP growth experienced in the U.S. was 4.2 per cent, effectively they are saying that the growth rate that Trump claimed in his address to the United Nations this week made the USA economy the "envy of the world" and the "fastest-growing economy in the world" (it isn't) is temporary and unsustainable and is going to fall away quite sharply. The Fed wants to avoid that whiplash.

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