Mortgage rates will be higher, as will credit card interest rates and vehicle loans.
Dow e-minis were up 37 points, or 0.17 percent, with 5,550 contracts changing hands. But the Fed maintained its forecast for three rate hikes next year.
The Fed now sees the unemployment rate ending the year at 4.3 percent, where it sits currently, rather than the 4.5 percent previously expected.
But the estimate for the central bank's preferred measure of inflation, the PCE price index, was cut three-tenths to 1.6 percent, while the core PCE, which excludes volatile food and energy prices, was cut two-tenths to 1.7 per cent, according to the Summary of Economic Projections. Annual inflation is running at 1.7 percent.More news: Cubs, Commissioner's Trophy visit President Trump at White House
The Fed kept forecast for economic growth this year of 2.2 per cent, up slightly from its March forecast, with growth of 2.1 per cent in 2018 and 1.9 per cent in 2019.
A number of Fed officials have spoken of the likelihood of the central bank scaling back its bond holdings which the Fed amassed after the 2008 financial crisis in order to keep long-term interest rates low to support economic growth.
'In any case, any acceleration in wages and inflation is likely to be gradual, meaning the Fed will be under little pressure to tighten policy in the next few months, ' she said.
The Hong Kong Monetary Authority (HKMA) boosted borrowing costs by 25 basis points to 1.5 percent after the Fed raised its target range by the same amount.More news: Manslaughter charges filed in YouTube stunt gone wrong
The Fed's actions and words struck a careful balance between showing resolve to continue tightening in response to falling unemployment while acknowledging the persistence of unexpectedly low inflation this year.
Since the financial crisis as the Fed has bought government and mortgage-backed bonds to underpin the American economy, but policymakers have confirmed that they will start to reduce reinvesment of bonds as they mature. US employers continue to add jobs at a steady rate. There would be gradually rising monthly offloading targets for different types of securities that the Fed holds on its balance sheet.
Yellen, the first woman to lead the Fed, is serving a term that will end in February.
The most interesting thing about this meeting is that it comes at a time when the Dollars has endured a less than stellar jobs report (some decried it as disastrous, ) and with inflation possibly slowing as forecasts for last month's CPI see it dipping from 2.2% back to 2.0%. "It's going to be the equivalent of about one rate hike a year".More news: Handmaids Descend on the Capitol to Protest Senate Republicans' Health Care Bill
- Trump hails 'energy revolution' as exports surge
- New cyber attack shuts down largest terminal of Los Angeles Port
- Clippers agree to trade All-Star Chris Paul to Rockets, AP source says
- GOP infighting stalls budget plan
- 'Ransomware' wave seemed aimed at old flaw and Ukraine
- Mongolians vote for president amid graft, financial concerns
- A man helped a lost toddler find her parents, police say
- Mattis says Syria's government taking US threat seriously
- CNN journalists resign over retracted story
- Police search for woman missing from Raleigh airport