The United States Federal Reserve on Wednesday announced a quarter-point increase in the benchmark interest rate to manage the rising inflation, the first rate hike since the start of the COVID-19 pandemic.

The policy-setting Federal Open Market Committee said the fallout from the Ukrainian conflicts is "likely to create additional upward pressure on inflation and weigh on economic activity," and noted that "ongoing increases" in the policy rate will be "appropriate."

Members of committee raised their U.S. inflation forecast for the year to 4.2 percent from 2.6 percent previously, and slashed the growth estimate to 2.8 percent from 4.0 percent.