AP Photo/Mark Lennihan
Traders at the New York Stock Exchange listen as Federal Reserve Chair Jerome Powell is seen on a video screen giving a news conference from Washington after the Fed announced a rate increase, Wednesday, Dec. 19, 2018.
- The Fed increased its benchmark interest rate by a quarter percentage point on Wednesday.
- It also signaled there may be fewer hikes ahead than previously expected.
- Stocks plummeted following the decision.
The Federal Reserve on Wednesday raised its benchmark interest rate by a quarter percentage point to a target range of between 2.25% and 2.5%, marking the fourth hike this year and the ninth since 2015. The central bank also signaled it would take a tentative approach to setting monetary policy next year, lowering its forecast from three hikes to two.
Markets fell sharply following the announcement. The S&P 500 recorded its largest drop following an interest rate decision since February 1994, according to analysis by the Financial Times. The Dow Jones Industrial Average and the Nasdaq Composite also suffered steep losses.
The dollar slumped, meanwhile, weakening to near two-month lows against the yen. The yield on the 10-year Treasury note dropped to 2.782%, its lowest close in nearly seven months.
Here's what Wall Street is saying about the decision.