The U.S. Federal Reserve (Fed) raised the key interest rate again Wednesday and signaled more hikes would be coming as the country battles soaring inflation.

It was the third consecutive increase of 0.75 percentage points by the Fed's policy-setting Federal Open Market Committee (FOMC), continuing the aggressive action to tamp down inflation that has soared to the highest in 40 years.

The increase takes the policy rate to 3.0-3.25%, and the FOMC said it "anticipates that ongoing increases... will be appropriate."

Fed officials currently see U.S. gross domestic product (GDP) slowing sharply in 2022, and growth in 2023 and said ongoing rate hikes will be needed to bring down inflation.

The euro to dollar ratio hit 0.9814 for the first time since October 2002, just months after the currency became the sole legal tender of 12 European Union states.

Wall Street stocks, which had been in the positive territory prior to the 6 p.m. GMT Fed statement, tumbled into the red after the announcement.

All three major indices were in negative territory, with the broad-based S&P 500 down 0.6% at 3,834.10.

The latest Fed statement included interest rate projections for the end of 2023 and 2024 that are higher than the previous forecasts, signaling the U.S. central bank now sees the need for a more prolonged monetary tightening cycle in light of inflation trends.

"Overall, the message from the (Fed) remains hawkish, with the Fed committing to further rates hikes to combat inflation and keep inflation expectations anchored," said a note from High Frequency Economics.