After rate hikes in December 2015 and December 2016, the Fed raised rates again in March, as unemployment and inflation hovered around the bank's target ranges.

The Federal Reserve increased short-term interest rates by a quarter percentage point on Wednesday, and outlined a plan to trim its massive bond holdings amassed to bolster a recession-weakened economy. Fed officials reiterated their belief that that both inflation and economic growth will pick up. Asian stocks were mixed Wednesday following Wall Street's tech-driven rise as investors waited for word from the U.S. Federal Reserve on a possible interest rate hike. While the recent raises of rates have left little imprints on the markets, the Fed should also be cautious of the long-term effects of increased aggression in their monetary policy, which provides a subsequent reason in favour of delaying a further increase to rates.

In the policy statement, the FOMC said: "Inflation on a 12-month basis is expected remain somewhat below two percent in the near term but to stabilize around the committee's two percent objective over the medium term". The rate, which can fluctuate a bit daily, usually settles somewhere in the middle.

Traders would be looking for any hint of the Fed's future rate-setting policy for the remainder of 2017.

Although there is reason to believe that the European Central Bank will also move towards a more hawkish stance, this is unlikely to occur until 2018.

They forecast USA economic growth of 2.2 per cent in 2017, an increase from the previous projection in March.

The Labor Department reported the rate fell to 4.3 percent in May, the lowest since 2001.

Estimates for the unemployment rate by the end of this year moved down to 4.3 percent, the current level, and to 4.2 percent in 2018, indicating the Fed believes the labor market will continue to tighten.

The Fed has a 2% target for core consumer inflation, but the annual number has weakened to 1.5% from 1.8% earlier in the year. London's FTSE 100 rose 0.5 percent to 7,541.

While the Fed was widely expected to discuss its balance-sheet reduction, many market pros did not expect to see as much detail as was provided in the Fed's statement, and some took that as hawkish.

This program would gradually reduce the Federal Reserve's securities holdings by decreasing reinvestment of principal payments from those securities.

Over time, the amount of assets would be reduced "to a level appreciably below that seen in recent years" but larger than before the crisis, Fed officials said. They now expect prices excluding food and energy to rise 1.7% this year, from a projection of 1.9% in March. Economists expect a rebound in the second quarter to at least 2 percent. Despite recent underwhelming jobs numbers, the underlying U.S. economic data remains robust enough to warrant tightening.

However, weaker economic data has weighed on the dollar and United States treasury yields, as consumer price inflation slowed for the fourth month in a row, to 1.7% in May. Yes, inflation remains elusive, and wage growth relatively weak, but the data does not suggest growth has slowed enough to suggest a change in tack.