The US Federal Reserve raised its main interest rate on Wednesday by a quarter of a percentage point to 1.5% - a move that came as no surprise to market participants and left the dollar weaker on the day.
As expected, the Fed's open market committee (FOMC) raised its Fed funds rate from 1.25% to 1.5% at its final meeting of the year, and chair Janet Yellen's final press briefing before Jerome Powell takes the hot seat.
It appeared to remain without conviction that the FOMC persisted in this final rate hike of 2017 - a year that has seen three upward moves in the Fed funds rate from 0.75% to 1.5%.
While the FOMC has been keen to note the robust nature of economic recovery in the US, thanks to rising global demand, it had always been with underlying caution over the depressed rate of inflation.
Headline consumer prices rose at an annual rate of 2.2% in November, data published earlier on Wednesday showed, up from 2% in October.
Retail sales have been strong in recent months, despite the effects of summer hurricanes, and later this week November sales, which take in the post-Thanksgiving shopping spree, are expected to show further growth.
Yet, the Fed remains perturbed by the lack of momentum in personal consumption expenditure (PCE), its favoured measure of inflation, which stands at 1.4% - well below the Fed’s 2% target rate.
This was, again, reflected in the FOMC's statement accompanying the rate hike.
The US central bank said: “Inflation on a 12-month basis is expected to remain somewhat below 2% in the near term but to stabilise around the Committee’s 2% objective over the medium term.”
It also maintained its guidance on future hikes: “The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate, which is likely to remain, for some time, below levels that are expected to prevail in the longer run.”
The dollar index, a measure of the US currency’s relative strength against a basket of its main rivals, was down 0.33% at 93.79. The pound rose 0.38% to $1.3369 and the euro climbed 0.34% to €1.1782.
Luke Bartholomew, strategist at Aberdeen Standard Investments, said: "Today was never really about the hike - that's been in the bag for a while - it's about what the Fed does next.
"It's clear that the Fed thinks it can hike three more times next year. But that's a forecast that markets don't yet buy, and it’s data more than rhetoric that will ultimately convince investors."
Stocks climbed, with the Dow Jones Industrial Average rising 0.47% to 24,619.7 and the S&P 500 adding 0.22% to 2,669.9.