Wall St tumbles, Fed raises interest rates by 25bps

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, Dec. 19, 2018. U.S. stocks careened to a 15-month low after Jerome Powell(on TV screen) failed to quell investor angst that the Federal Reserve's tightening policy will throttle economic growth.

NEW YORK: U.S. stocks declined sharply on Wednesday after the Federal Reserve's forecast of fewer interest-rate increases in 2019 fell short of investors' hopes of a more dovish monetary policy.

As expected, the U.S. central bank raised its key overnight lending rate by a quarter of a percentage point to a range of 2.25 percent to 2.50 percent. But within that range, the Fed set the interest it pays banks on excess reserves, known as IOER, at 2.40 percent, acting as an effective ceiling for the policy rate.