Fed Raises Interest Rates for First Time in Three Years Amid High Inflation

US stocks dipped on Thursday after the Federal Reserve hiked its main interest rate for the first time in three years, citing high inflation.

The S&P 500 fell 0.4%, while the Dow Jones Industrial Average dropped 631 points, or 1.2%.

Fed Chairman Kevin Warsh said the economy appears to be strengthening, with solid US hiring trends, corporate profits, and business investments.

However, he emphasized that inflation remains too high, and the central bank is committed to getting it back under control, targeting a 2% rate.

The median Fed official expects the federal funds rate to end this year at 4.1%, up from its current range of 3.75% to 4% following Wednesday's increase.