Fed chief Janet Yellen is delivering her analysis to the press conference. 

Business investment has "firmed somewhat" and business sentiment is "favourable", she said. 

Unemployment is "near a recent low" and "labour market underutilisation" - so-called slack, which depresses wages, is also "low, she said. 

Energy prices are now feeding into inflation and she anticipates 2% core inflation in the next couple of years, she adds. 

The central bank has issued updated forecasts for the US economy, which are little changed. 

Officials are expecting economic growth of 2.1% this year and next, falling to 1.9% in 2019. 

These forecasts are well below the 4% growth that President Donald Trump has said he can produce with his economic policies. 

Image source, Getty Images

Luke Bartholomew, an investment manager Aberdeen Asset Management, says the Fed faces a "tricky path from here". 

"The question now is how quickly the next few hikes come," he says.

"Over the last few years they’ve consistently overestimated how many hikes they will deliver because the economy has turned out weaker than they expected.

"But now the risk is that the Fed will need to catch up with easier fiscal policy and stronger growth outlook.

"Meanwhile, they’re facing increasingly shrill calls for their independence to be curtailed."

Image source, Google

The main US share indices have jumped following the Fed's decision to raise interest rates.

As this chart shows, the Dow Jones is now trading 0.48% higher at 20,936.94. 

The S&P 500 and Nasdaq are also up by 0.66% and 0.56% respectively.   

Image source, Reuters

It its statement, the FOMC adds: "The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. 

"However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data."  

Justifying its decision, the Fed pointed to fresh employment and inflation figures showing an economy in strong health. 

It said: "Job gains remained solid and the unemployment rate was little changed in recent months. 

"Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat. 

"Inflation has increased in recent quarters, moving close to the Committee's 2% longer-run objective; excluding energy and food prices, inflation was little changed and continued to run somewhat below 2%."

All but one member of the Federal Open Market Committee voted for a rate hike.

Only Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate, dissented. 

The Fed, as expected, has raised its benchmark interest rate by a quarter percentage point to 0.75-1%.

It said, external : "In view of realised and expected labour market conditions and inflation, the Committee decided to raise the target range for the federal funds rate.

"The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labour market conditions and a sustained return to 2% inflation."

Image source, Getty Images

US markets picked up on Wednesday ahead of the end of the Federal Reserve's latest monetary policy meeting. 

The US central bank will make an announcement shortly, and analysts say it is highly likely to raise interest rates - for the third time since 2008 - to reflect the gathering steam in the US economy.

We'll also be getting the latest American inflation and wage figures.

In early afternoon trade the Dow Jones had gained 0.22% to 20,883.43, the S&P 500 was up 0.38% at 2,374.62, and the Nasdaq composite was 0.3% higher at 5,874.22.

Sir Desmond Swayne amused MPs by recanting an article he wrote in support of the tax increase - before it is even published.

"I'm in some difficulty", he said in the Commons. "My article robustly supporting the Chancellor's earlier policy in the Forest Journal is already with the printer."

The New Forest West MP said he was "persuaded of the correctness" of Mr Hammond's U-turn but that he "merely needed an opportunity in which to recant". 

Douglas Fraser
Scotland business & economy editor

ITV political editor, Robert Peston tweets:

With the NICs U-turn likely to leave a £2bn hole in the public finances, commentators have been offering the Chancellor ideas about how make up the shortfall.

James Dalton of the Association of British Insurers, said: “The government  can fill the void in its accounts by bringing in a more sensible discount rate used to calculate personal injury compensation. 

"As last week’s Budget confirmed, the ill-judged decision to reduce the discount rate to minus 0.75% will lead to a massive £6 billion hit on the NHS so this seems an obvious course of action to take." 

Image source, Getty Images

The NICs U-turn suggests the government is struggling to get through "even moderately unpopular policies", says Tom McPhail, head of retirement policy at Hargreaves Lansdown.

"[This] was a modest and re-distributive measure which would have helped bring the self-employed National Insurance rates closer into alignment with the increased state pension benefits they now enjoy," he says.

"If this is how it is going to be until 2020, the government might be better off triggering an early general election in pursuit of a fresh mandate and an increased majority."

In the meantime, he says the U-turn will increase pressure in other areas of fiscal policy and "may increase the risk of further pension tax tinkering in the Autumn Budget".

Money Box presenter, Paul Lewis tweets: