The US Federal Reserve raised borrowing costs for the fourth time this year but pared back its plans for rate hikes next year.
The Fed ignored a US stock-market selloff and warnings from US President Donald Trump by sending rates higher, although today's move was widely anticipated.
By trimming the number of rate hikes they foresee in 2019, to two from three, the Fed signalled that it may soon pause their monetary tightening campaign.
Harbour Asset Management portfolio manager Shane Solly said the Fed's moves may offer some relief sharemarket investors, who have seen share prices come off sharply in recent weeks.
He said the slightly dovish stance for 2019 was largely expected but markets were caught off-guard by a lower growth outlook for next year.
"The thing that has caught people by surprise is that the Fed has wound back its forecasts for GDP next year from 2.5 per cent to 2.3 per cent," Solly said.
Officials had a median projection of one move in 2020.
Fed chairman Jerome Powell and his colleagues said "economic activity has been rising at a strong rate'' in a statement Wednesday following a two-day meeting in Washington.
The Fed acknowledged the possible threats coming from a softening world economy.
Wednesday's unanimous 10-0 decision lifted the target range for the federal funds rate to 2.25 per cent to 2.5 per cent.
Financial markets have been turbulent for weeks, with the S&P 500 Index of US stocks dropping 13 per cent from the end of September through to Tuesday.
Yields on 10-year US Treasuries have also been volatile, dropping to 2.82 per cent this week after hitting a seven-year high of 3.26 per cent in October.
Powell's task is also complicated by the repeated attacks from Trump.
-- Additional reporting Bloomberg