Federal Reserve Chairman Jerome Powell speak at a news conference in Washington, Wednesday, Dec. 19, 2018. The Federal Reserve is raising its key interest rate for the fourth time this year to reflect the U.S. economy's continued strength but signaling that it expects to slow hikes next year. (AP Photo/Susan Walsh)
Federal Reserve Chairman Jerome Powell speak at a news conference in Washington, Wednesday, Dec. 19, 2018. The Federal Reserve is raising its key interest rate for the fourth time this year to reflect the U.S. economy's continued strength but signaling that it expects to slow hikes next year. (AP Photo/Susan Walsh) Credit: Susan Walsh

Washington — The Federal Reserve raised its key interest rate on Wednesday for the fourth time this year to reflect the U.S. economy’s continued strength but signaled that it expects to slow its rate hikes next year.

Despite the forecast for fewer hikes, investors sent stocks plunging once Chairman Jerome Powell began a news conference, apparently disappointed that Powell didn’t go further to signal a slowdown in rate increases.

Wednesday’s quarter-point increase, to a range of 2.25 percent to 2.5 percent, lifted the Fed’s benchmark rate to its highest point since 2008. It will mean higher borrowing costs for many consumers and businesses.

The Fed’s move came despite President Donald Trump’s attacks in recent weeks on its rate hikes and on Powell personally. The president has complained that the moves are threatening the economy. At a news conference after the Fed’s announcement, Powell said Trump’s tweets and statements would have no bearing on the central bank’s policymaking.

The statement the Fed issued on Wednesday after its latest policy meeting said that only “some” further gradual rate increases are likely; previously, it spoke simply of “further gradual increases.” And its new forecast projects two rate hikes next year, down from three the Fed had predicted in September.

U.S. stocks had been up sharply before the Fed’s announcement, but the Dow Jones Industrial Average closed down about 352 points. Bond prices surged, though, sending yields lower.

The central bank has raised rates with steady regularity as the U.S. economy has strengthened. Wednesday’s was the Fed’s ninth hike since it began gradually tightening credit three years ago. But a mix of factors — a global slowdown, a U.S.-China trade war, still-mild inflation, stomach-churning drops in stock prices — has led the Fed to consider slowing its rate hikes to avoid weakening the economy too much. It’s now likelier, as Powell said at his news conference, to suit its rate policy to the latest economic data — to become more flexible or, in Fed parlance, “data-dependent.”

Powell acknowledged the shift in the Fed’s strategy.

“We’re going to be letting incoming data inform our thinking about the appropriate path” of future rate increases, he said.

In recent years, the Fed has managed to telegraph its actions weeks in advance to prepare the financial markets for any shift. But now, the risks of a surprise could rise. Next year, Powell will begin holding a news conference after each of the Fed’s eight meetings each year, rather than only quarterly. This will allow him to explain any abrupt policy changes. But it also raises the risk that the Fed will jolt the markets by catching them off guard.

Some analysts say the Fed might want to pause in its credit-tightening to assess how the economy fares in the coming months in light of the headwinds it faces.