Investing.com – The Federal Reserve increased its key interest rate by 0.25% to a 0.75%-1% range on Wednesday.
The Federal Reserve struck a familiar tone in its statement, pointing out that interest rate increases “will be gradual” in 2017, and maintained its view of three rate hikes, with the remaining two rate hikes expected later this year.
The Fed opted for a somewhat softer outlook concerning GDP gains as it left 2017 and 2019 forecasts of GDP unchanged at 2.1% and 1.9%, respectively, but its 2018 GDP forecast was increased by 0.1% to 2.1%.
Following the release of the Federal Reserve's interest rate decision to increase rates by 0.25% to a 0.75%-1% range, the dollar slumped while gold prices rose to new highs for the session.
The interest rate hike was widely expected by market participants, after investing.com's fed rate monitor spiked to its highest level.
The U.S. dollar index slumped 0.87% to trade at 100.74.
Gold futures rose $10.3, or 0.80% to $1210, while Treasury yields fell 3.09% with the U.S. 10-Year trading at around 2.517 by 14:08 EDT.
Elsewhere, The Dow Jones Industrial Average spiked 0.59% higher to 20,914. The S&P 500 gained 0.56% and the Nasdaq Composite climbed 0.51% to trade at 5,886.