The Fed's decision to raise rates, announced in a statement after its latest policy meeting, was approved 8-1, with Neel Kashkari, head of the Fed's Minneapolis regional bank, dissenting in favor of holding rates unchanged.
Markets largely ignored a shooting that wounded the third-highest ranked U.S. House Republican and at least four others at a congressional baseball practice in Alexandria, Virginia.
In explaining the second rate hike of 2017, the Fed noted that "the labor market has continued to strengthen and that economic activity has been rising moderately so far this year", but acknowledged that the preferred inflation measure will remain below the two percent target for some time.
But the rate increase was already priced into most stocks.
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Despite that, the Summary of Economic Projections revealed that policymakers still expected one more 25 basis point interest rate hike in 2017.
Wall Street investors shouldn't be surprised by the rate hike: They estimated there was a 96% chance that the Fed would raise rates after its two-day meeting. These bundles of bonds were purchased by the Fed following the housing crisis in an effort to prop up the economy.
Employment hit a record high in both the euro area and the EU28 in the first quarter of the year amid sustained growth in the figures, preliminary data from Eurostat showed Wednesday. While the base case can be for another rate hike this year, it's not unthinkable that they could just pause until September or even December to get the "coast is clear" signal on inflation. It's this chart that provides the current expectation of three rate increases during 2017.
We'll email you each morning with the latest mortgage news. Several Fed officials have said publicly they expect the runoff program to continue until the balance sheet declines to about $2 trillion to $2.5 trillion. This process could put upward pressure on long-term borrowing rates.
The Fed is no longer buying new bonds.
The central bank could provide more details on its plans to shrink the mammoth bond portfolio it amassed to nurse the economic recovery.
Monetary theory suggests inflation expectations are a key harbinger of future price growth, and Fed officials often view it as a leading indicator.
The new forecasts may in part reflect changes in the FOMC since the last meeting, including the departures of Governor Daniel Tarullo and Richmond Fed President Jeffrey Lacker, and the arrival of new Atlanta Fed President Raphael Bostic.
Inflation has been more problematic, having long stayed below the central bank's 2 percent target rate.
Aldeyra Therapeutics dropped 16 percent to US$4.30 after the company said it failed to meet a goal in its conjunctivitis trial.