U.S. bank stocks moved down after the Federal Reserve said it would raise the federal funds rate by 50 basis points, bringing it to a range of 4.25% to 4.5%.

After the Fed's announcement, the KBW Nasdaq Bank Index was down about 1.80% at 2:55 p.m. on Dec. 14, while the S&P 500 was down about 0.80%. As of the market close, the index was down 1.69%, while the S&P 500 was down 0.61%.

The Fed's median projection for the terminal rate, or the rate at which it will cease hiking, is now 5.1%, up from 4.6% in September.

The central bank expects the personal consumption expenditures index, its preferred inflation gauge, to be 3.1% next year, up from its September projection of 2.8%. Additionally, the Fed forecast unemployment to average 4.6% in 2023, up from its September projection of 4.4%.

"We continue to anticipate that ongoing increases will be appropriate in order to obtain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time," Fed Chair Jerome Powell said during the post-meeting press conference. "In addition, we're continuing the process of significantly reducing the size of our balance sheet. Restoring price stability will likely require maintaining a restrictive policy stance for some time."

Among bank stocks, the biggest movers included PNC Financial Services Group Inc., down 2.93% on the day; East West Bancorp Inc., down 2.63%; and Regions Financial Corp., down 2.45%.

The consumer price index, the market's preferred inflation metric, increased by 7.1% year over year in November, the Bureau of Labor Statistics reported Dec. 13. That was down from annual growth of 7.7% in October. Economists expected an increase of 7.3%, according to Econoday. Annual consumer price index growth has now dropped or remained flat since June, when it reached 9%, the largest increase since 1981.