The Federal Reserve headquarters in Washington D.C. (Photo: AFP/VNA)

This is the 9th time the Fed has increased interest rates over the past year. In a statement, the Fed said the recent banking turmoil is likely to result in tighter credit for households and businesses and to weigh on economic activities, hiring, and inflation.

The Fed is anticipating another quarter-point increase to 5.1% by the end of this year.

Fed Chair Jerome Powell said at a news conference that the US banking system is sound and resilient, adding that the Fed is ready to use all its tools to stay safe. Powell left open the possibility of further rate hikes

The exchanges on Wall Street had mixed reactions to the Fed decision. Most key stocks fell. Closing the afternoon session, the S&P 500 dropped 65.9 points to 3,936.97; the NASDAQ Composite lost 190.15 points to 11,669.96; and the Dow Jones Industrial Average fell 530.49 points to close at 32,030.11. Crypto and oil markets also dipped following the announcement.