The U.S. central bank reduced its overnight borrowing rate by a quarter point to a target range of 4.25% to 4.5%, as expected.

However, new quarterly forecasts showed several officials penciled in fewer rate cuts for next year than they estimated just a few months ago, and saw inflation making considerably less progress in 2025.

• The Nasdaq 100 fell 3.6% and the S&P 500 sank nearly 3%

• The two-year Treasury yield, which is highly sensitive to Fed policy, surged 10 basis points to 4.34%

• U.S. dollar jumped more than 1% against a basket of six peers to the highest level since November 2022

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