The rate rise was largely expected as the US central bank has been clear that its current priority is to slow the economy to cool persistent inflation pressures, writes Neils Christensen for Kitco News.
Looking beyond the monetary policy decision, updated economist forecasts shows the central bank predicts higher rates through 2024.
The Federal Reserve's interest rate projections, also known as the dot plot, sees the Fed Funds rate rising to 4.4% by the end of this year, up from the previous estimate of 3.4%.
Looking at 2023, the Fed Funds rate is expected to rise to 4.6%, up from June's estimate of 3.8%. Interest rates for 2024 are expected to come in at 3.9% up from June's projection of 3.4%.
In the first look at 2025, the Fed predicts interest rates rising 2.9%, which is slightly higher than expected long-term rate of 2.5%.
