US bank stocks fell after the Federal Reserve announced it would keep the federal funds rate within the range of 5% to 5.25%.

The Federal Open Market Committee (FOMC) has raised benchmark interest rates by 500 basis points since March 2022.

"Looking ahead, nearly all committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down to 2% over time," Fed Chair Jerome Powell said.

The Fed's Summary of Economic Projections, released June 14 alongside the rate hike decision, revealed Fed officials' average projected federal funds rate of 5.6% for this year, up from the March estimate of 5.1%.

The projections also included the FOMC's median expectation of a 3.2% rise in personal consumption expenditure inflation in 2023, down from the March 2023 projection of 3.3%. The central bank expects the personal consumption expenditures index, its preferred inflation gauge, to be 2.5% in 2024, the same amount it predicted in March.

In addition, the Fed forecast unemployment to average 4.1% in 2023, down from its March projection of 4.5%.

After the Fed's announcement, the KBW Nasdaq Bank Index was down 1.83% at market close June 14 while the S&P 500 was up 0.084% for the day. Among individual bank stocks, the biggest movers included First Horizon Corp. down 5.76%, KeyCorp down 5.44%, and Citizens Financial Group Inc. down 3.88%.

The overall consumer price index, which tracks the prices of products such as eggs, gasoline and airline tickets and is also known as headline inflation, rose 4.1% from May 2022 to May 2023 after a seasonal adjustment, the US Bureau of Labor Statistics reported June 13. On an annual basis, the measure of inflation peaked at 8.9% in June 2022.