The S&P 500 index retreated late in the trading day on Wednesday, under pressure from the financial sector after the Federal Reserve made a widely expected interest rate hike but kept its rate outlook for coming years even as it projected faster economic growth.

The S&P was dragged lower by a late-session decline in bank stocks, although banks often see increased profits each time the Fed raises rates. The financial sector index closed out the day with a drop of 1.3 percent suggesting the expectation was for a more hawkish Fed.

The consumer staples sector index was the strongest of the S&P’s 11 sectors with a 0.5 percent gain. The S&P utilities sector pared gains after hitting a session high to end up 0.3 percent.

Investors were also keeping a sharp eye on the progress of the tax law overhaul that would involve a corporate tax cut.

Shortly before the Fed news, congressional Republicans said they had reached a deal on tax legislation and President said he would back a corporate tax rate of 21 percent.

Earlier in the day a Labor Department report showed underlying consumer inflation slowed in November, possibly affecting the pace at which the Fed raises interest rates.

Investors also assessed Democrat Doug Jones’ victory in a bitter fight for a Senate seat in deeply conservative Alabama on Tuesday. It is possible that Jones’ win could result in trouble for Trump’s policy agenda as it narrows the Republicans’ already slim majority in the Senate.

Approximately 6.77 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.53 billion share daily average over the past 20 trading sessions.

Consumer Inflation Slows

Consumer inflation slowed in November amid weak healthcare costs and the largest decline in apparel prices since 1998. The moderation in underlying prices will likely attract the attention of Federal Reserve officials. There are concerns among some Fed members that the factors behind the tame inflation could prove more persistent.

The Labor Department reported on Wednesday morning that its Consumer Price Index, excluding the volatile food and energy components, rose 0.1 percent as prices for airline fares and household furnishing fell. The core CPI advanced 0.2 percent in October.

As a result, the annual increase in the core CPI slowed to 1.7 percent in November from 1.8 percent in October.

The Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, has consistently undershot the U.S. central bank’s 2 percent target for almost 5-1/2 years.

The overall CPI increased 0.4 percent in November after edging up 0.1 percent in October. That raised the year-on-year increase in the CPI back to 2.2 percent from 2.0 percent in October.

The mixed CPI report probably has little impact on expectations that the Fed will raise interest rates at the end of today’s meeting, encouraged by a tightening labor market and strengthening economy, which policymakers believe will boost inflation over time.

Last month, gasoline prices rebounded 7.3 percent after falling 2.4 percent in October. Food prices were unchanged for a second straight month. The cost of rental accommodation rose 0.3 percent, matching the increase in October.

Owners’ equivalent rent of primary residence gained 0.2 percent after rising 0.3 percent in October. The cost of healthcare services fell 0.1 percent, the first drop since May. The cost of doctor visits fell 0.8 percent last month. In the 12 months through November, the price of doctor visits fell 1.8 percent, the largest decline since records started in 1947.

Apparel prices dropped 1.3 percent, the largest drop since September 1998. New motor vehicle prices rose 0.3 percent after two straight monthly declines.

Fed Raises Interest Rates

The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, but left its rate outlook for the coming years unchanged even as it projected a short-term acceleration in U.S. economic growth.

The move, coming at the final policy meeting of 2017 and on the heels of a flurry of relatively bullish economic data, represented a victory for a Fed that has vowed to continue a gradual tightening of monetary policy.

Having raised its benchmark overnight lending rate three times this year, the Fed projected three more hikes in 2018 and 2019 before a long-run level of 2.8 percent is reached. That is unchanged from the last round of forecasts in September.

“Economic activity has been rising at a solid rate … job gains have been solid,” the Fed’s policy-setting committee said in a statement announcing the federal funds rate had been lifted to a target range of 1.25 percent to 1.50 percent.

The Fed acknowledged in its latest forecasts that the economy had gained steam in 2017, it raised economic growth forecasts and lowered the expected unemployment rate over the coming years.

Gross domestic product is expected to grow 2.5 percent in 2018, up from the 2.1 percent forecast in September, while the unemployment rate is seen falling to 3.9 percent next year, compared to 4.1 percent in the last set of projections.

However, inflation is projected to remain shy of the Fed’s 2 percent goal for another year, with weakness on that front remaining enough of a concern that policymakers saw no reason to accelerate the expected pace of rate increases.

That means that the Trump administration’s tax overhaul, if passed by Congress, would take effect without the central bank having flagged any likely response in the form of higher rates or concerns of a jump in inflation.

Policymakers do see the federal funds rate rising to 3.1 percent in 2020, slightly above the 2.8 percent “neutral” rate they expect to maintain in the long run. That indicates possible concerns about a rise in inflation pressures over time.

As it stands, inflation is expected to remain below the Fed’s target in the near term and is being monitored “closely” by policymakers.

Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari dissented in the Fed’s policy statement on Wednesday.

The Fed also said that, as of January, it would raise the amount of Treasury bonds and mortgage-backed securities that would not be rolled over, on a monthly basis, to $12 billion and $8 billion, respectively. That is consistent with its balance sheet reduction plan.