WASHINGTON (Reuters) - The U.S. Federal Reserve raised interest rates on Wednesday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth. 
 
 In a statement that marked the end of the era of “accommodative” monetary policy, Fed policymakers lifted the benchmark overnight lending rate by a quarter of a percentage point to a range of 2.00 percent to 2.25 percent. 
 
 The U.S. central bank still foresees another rate hike in December, three more next year, and one increase in 2020. 
 
 That would put the benchmark overnight lending rate at 3.4 percent, roughly half a percentage point above the Fed’s estimated “neutral” rate of interest, at which rates neither stimulate nor restrict the economy. 
 
 That tight policy stance is projected to stay level through 2021, the timeframe of the Fed’s latest economic projections. 
 
 “The thing that folks were watching for, which they went ahead and did, was remove the word ‘accommodative’ in regard to their monetary policy,” said Michael Arone, chief investment strategist at State Street Global Advisors. 
 
 “It does seem to potentially indicate they believe monetary policy is becoming less accommodative and getting more towards that neutral rate.” 
 
 Fed Chairman Jerome Powell said the removal of the wording, which had been a staple of the central bank’s guidance for financial markets and households for much of the past decade, did not signal a policy outlook change. 
 
 “Instead, it is a sign that policy is proceeding in line with our expectations,” Powell, who took over as head of the Fed earlier this year, said in a press conference after the release of the statement. 
 
 The U.S. Treasury yield curve flattened and the U.S. dollar .DXY briefly weakened against a basket of currencies. U.S. stocks initially extended gains but fell later in the trading session, with bank and financial stocks getting hit hard. 
 
 The Fed sees the economy growing at a faster-than-expected 3.1 percent this year and continuing to expand moderately for at least three more years, amid sustained low unemployment and stable inflation near its 2 percent target. 
 
 “The labor market has continued to strengthen ... economic activity has been rising at a strong rate,” it said in its statement. 
 
 The Fed inserted no substitute language for the dropped ‘accommodative’ wording in its statement. That wording had become less and less accurate since the central bank began increasing rates in late 2015 from a near-zero level, and its removal means the Fed now considers rates near neutral. 
 
 NEW PROJECTIONS 
 
 Wednesday’s rate increase once again drew criticism from President Donald Trump, who has complained that the Fed’s actions are countering his efforts to boost the economy. 
 
 “We’re doing great as a country. Unfortunately they just raised interest rates because we are doing so well. I’m not happy about that,” Trump told a press conference on the sidelines of the United Nations General Assembly in New York. 
 
 U.S. Federal Reserve Chairman Jerome Powell holds a news conference following a two-day Federal Open Market Committee (FOMC) policy meeting in Washington, U.S., September 26, 2018. REUTERS/Al Drago 
 
 “I’d rather pay down debt or do other things, create more jobs. So I’m worried about the fact that they seem to like raising interest rates.” 
 
 Powell, at his press conference, declined to say whether Fed policymakers had discussed Trump’s previous criticism of the central bank. Last month, Trump expressed his displeasure about rising rates and said the Fed should do more to boost the economy. 
 
 Powell, who was appointed by Trump and took over as Fed chairman earlier this year, said the central bank would remain independent. 
 
 “We don’t consider political factors or things like that,” the Fed chief said. 
 
 Wednesday’s rate hike was the third this year and the seventh in the last eight quarters. Ahead of Wednesday’s statement, traders put the chance of a rate increase at 95 percent, according to CME Group. 
 
 The Fed’s latest projections show the economy continuing at a steady pace through 2019, with gross domestic product growth seen at 2.5 percent next year before slowing to 2.0 percent in 2020 and to 1.8 percent in 2021, as the impact of recent tax cuts and government spending fade. 
 
 Inflation was forecast to hover near 2 percent over the next three years, while the unemployment rate is expected to fall to 3.5 percent next year and remain there through 2020 before rising slightly in 2021. 
 
 The jobless rate is currently 3.9 percent. 
 
 With risks described as roughly balanced, the statement left the Fed on a steady course for the next year. 
 
 Slideshow (3 Images) 
 
 Risks to the current run of economic growth, such as the threat of a damaging round of global tariff increases, were largely set aside. 
 
 There were no dissents in the Fed’s policy statement. 
 
 (For graphic on accommodating change at Fed, click tmsnrt.rs/2N4NL1x) 
 
 (This version of the story has been refiled to fix typo in headline) ||||| FILE- In this July 17, 2018, file photo Federal Reserve Board Chair Jerome Powell testifies before the Senate Committee on Banking, Housing, and Urban Affairs on "The Semiannual Monetary Policy Report... (Associated Press) 
 
 FILE- In this July 17, 2018, file photo Federal Reserve Board Chair Jerome Powell testifies before the Senate Committee on Banking, Housing, and Urban Affairs on "The Semiannual Monetary Policy Report to the Congress," at Capitol Hill in Washington. On Wednesday, Sept. 26, the Federal Reserve issues... (Associated Press) 
 
 FILE- In this July 17, 2018, file photo Federal Reserve Board Chair Jerome Powell testifies before the Senate Committee on Banking, Housing, and Urban Affairs on "The Semiannual Monetary Policy Report to the Congress," at Capitol Hill in Washington. On Wednesday, Sept. 26, the Federal Reserve issues... (Associated Press) FILE- In this July 17, 2018, file photo Federal Reserve Board Chair Jerome Powell testifies before the Senate Committee on Banking, Housing, and Urban Affairs on "The Semiannual Monetary Policy Report... (Associated Press) 
 
 WASHINGTON (AP) — The Latest on the Federal Reserve's monetary policy meeting (all times local): 
 
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 2:05 p.m. 
 
 Federal Reserve policymakers expect to hike rates one more time this year, three times next year and only once in 2020, the same as they forecast in June, according to projections released Wednesday after a two-day meeting. 
 
 Fed officials also foresee faster growth this year, at 3.1 percent, up from an estimate of 2.8 percent three months earlier. 
 
 September's figures also included their first projections for 2021. Fed policymakers expect growth will slow to 1.8 percent that year and the unemployment rate will rise to 3.7 percent, from 3.5 percent the previous year. That would be consistent with the Fed's rate hikes slowing growth to forestall inflation. It sees price increases remaining in check, rising 2.1 percent over the next three years. 
 
 The Fed releases economic and interest rate forecasts every three months. 
 
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 2:00 p.m. 
 
 Federal Reserve officials voted Wednesday to raise a key, short term interest rate for the third time this year. 
 
 Investors largely expected an increase in the federal funds rate — the interest that banks charge each other — based off public statements by Fed officials. The fed funds rate was increased to a range of 2 percent to 2.25 percent, up from a level of near-zero between the end of 2008 and late 2015. 
 
 The higher range points to an improving U.S. economy with inflation staying near the Fed's target of 2 percent. The vote to raise rates was 9 to 0. 
 
 In their statement announcing the decision, Fed officials removed a sentence in prior statements that said its interest rate policy was supporting a strong job market and a return to 2 percent inflation. By eliminating that statement, they're suggesting that those goals are now within reach and that rate hikes will likely continue. 
 
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 10:45 a.m. 
 
 Financial markets held steady Wednesday as investors waited for the Federal Reserve's latest decision on interest rate policy. 
 
 The Fed was widely expected to make the third increase this year in its benchmark short-term interest rate. 
 
 Investors will be closely watching to see what the Fed and Chairman Jerome Powell say about what's coming next. Another increase is expected in December, with more to follow next year. 
 
 Rates are still low, but investors worry a quick jump would unsettle markets and halt what's become the longest bull market for U.S. stocks on record. 
 
 Major U.S. stock indexes were slightly higher in morning trading, and Treasury yields were slightly lower. The yield on the 10-year Treasury note slipped to 3.09 percent from 3.10 percent a day earlier. 
 
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 4:55 a.m. 
 
 Financial markets are subdued as investors look ahead to the Federal Reserve's latest policy meeting, at which it is expected to raise its main interest rate for the third time this year. 
 
 Stock markets are mixed, with Wall Street futures up a modest 0.2 percent, ahead of the meeting. The dollar is steady against major currencies like the euro and yen. 
 
 The Fed is expected to lift its key rate on Wednesday from a range of 1.75-2 percent to a still-low 2-2.25 percent. The move reflects the U.S. economy's resilient expansion amid tax cuts and government spending. There are questions, however, whether the trade dispute could hurt the outlook. 
 
 Investors will keep an eye on a news conference by Chairman Jerome Powell for more clues to the Fed's views. 
 
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 4:45 a.m. 
 
 The Federal Reserve is set Wednesday to raise interest rates for a third time this year and possibly modify the likely direction of rates in the months ahead. 
 
 The big question is whether the strong U.S. economy, which has been fueled this year by tax cuts and increased government spending, could weaken next year, especially if President Donald Trump's trade fights begin to inflict damage and the benefits of tax cuts start to fade. 
 
 If the Fed finds that prospect likely, it might signal Wednesday that it expects to slow its rate increases next year. 
 
 The Fed's key short-term rate now stands in a range of 1.75-2 percent after two quarter-point increases in March and June. A similar rate hike Wednesday would raise that range to a still-low 2-2.25 percent.
– Federal Reserve officials voted Wednesday to raise a key, short term interest rate for the third time this year, the AP reports. Investors largely expected an increase in the federal funds rate—the interest that banks charge each other—based off public statements by Fed officials. The benchmark overnight lending rate was increased by a quarter of a percentage point, to a range of 2% to 2.25%, Reuters reports. That's up from a level of near-zero between the end of 2008 and late 2015. The higher range points to an improving US economy with inflation staying near the Fed's target of 2%. The vote to raise rates was 9 to 0. In their statement announcing the decision and marking the end of the "accommodative" monetary policy era, Fed officials removed a sentence in prior statements that said its interest rate policy was supporting a strong job market and a return to 2% inflation. By eliminating that statement, they're suggesting that those goals are now within reach and that rate hikes will likely continue, per the AP. Federal Reserve policymakers expect to hike rates one more time this year, three times next year, and only once in 2020, the same as they forecast in June. That would put the rate at 3.4% by 2020, about half a percentage point above the estimated "neutral" rate at which interest rates don't restrict or stimulate the economy.