Fed Raises Interest Rates for First Time in Three Years

The Federal Reserve's decision to raise interest rates for the first time in three years had a mixed impact on U.S. stocks, causing them to slip after an initial modest gain.

Investors generally prefer lower interest rates because higher rates slow economic growth and reduce prices for stocks and other investments.

The Fed raised its main interest rate from 3.75% to 4%, citing the need to combat high inflation, which has consistently remained above the central bank's 2% target.

According to forecasts published after the meeting, the median Fed official expects the federal funds rate to end this year at 4.1%, up from its current range and higher than the previous forecast of 3.8%.