The Fed has raised interest rates just now by .25%, and has also flagged 3 more for 2017.
Markets dropped in response, the prospect of a third cut next year more than expected.
The Dow Jones industrial average briefly rose more than 50 points to hit a new record high, before trading about 150 points lower, with Exxon Mobil contributing the most losses. The S&P 500 held about 1 percent lower following the decision, with utilities and energy falling 2 percent to lead decliners. The Nasdaq composite dropped 0.7 percent
The Federal Open Market Committee raised its target range from 0.25 percent to 0.5 percent to a range of 0.5 percent to 0.75 percent. The overnight funds rate currently sits at 0.41 percent. In addition to approving the much-expected increase, the FOMC also indicated a higher rate than projected back in September when it last released the quarterly look ahead. The committee now expects three rate hikes in 2017, two or three in 2018 and three in 2019.
"The market reaction to the rate hike and to some of the comments ... are appropriate," said Erik Schiller, senior portfolio manager at Prudential Fixed Income. "It's a very consensus path reflected in the dot plots." 1
In oil markets, U.S. crude for January delivery fell 3.7 percent to settle at $51.04 per barrel, after the Energy Information Administration reported a drawdown of 2.6 million barrels.
