Markets worry about the impact of higher borrowing costs squeezing consumers and businesses in the world's biggest economy as well as the knock-on effects across the globe - such as in those countries which have borrowed heavily in dollars to fund growth.
The rate peaked at 2.4 per cent in July, but has move downwards since.
However, Mr Trump - who appointed the Fed's chairman Jerome Powell - has repeatedly blamed the central bank for unsettled markets and dismissed analysts who cite other factors, such as rising trade tariffs.
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Trump has privately discussed Powell's ouster several times this week, two Trump advisers told Bloomberg.
It's unclear how much legal authority the president has to fire Powell.
Observing that neither the pace nor the ultimate destination of any further rate increases is predetermined, Powell said the Fed will adjust monetary policy as best it can to keep the expansion on track, the labour market strong and inflation near two per cent. "So there's a fairly high degree of uncertainty about both the path and the ultimate destination of any further increases".
But like anyone seeking a compromise, Powell ended up making few people happy.
Spiraling losses in tech shares have pushed the Nasdaq Composite Index to the precipice of becoming the first major USA stock gauge to enter a bear market since 2009. "If it had been more hawkish, investors would have anxious. the Fed would kill off yet another recovery".
It was a sea of red: Stocks in the US, Europe and Asia are all sharply lower on Thursday.
Judge Refuses To Dismiss Sexual Assault Charges Against Harvey Weinstein
The second argument is that Weinstein's accusers are lying about the nature of their sexual contact with the movie mogul. In May, Harvey Weinstein turned himself in to police following allegations by several women of sexual misconduct.
The broad-based S&P 500 shed 2.1 percent to 2,492.21, while the tech-rich Nasdaq Composite Index tumbled 2.9 percent to 6,588.59.
"It's gone up significantly more than the other major indices and that has a lot to do with why it's fallen the most". Silver added 0.8 percent to $14.82 an ounce.
It will mean higher costs for business loans, balances on credit cards, auto loans, and home equity loans.
In a tweet on Tuesday, Trump said that the Federal Reserve should "take the Victory" of a strong USA dollar while "the outside world is blowing up around us", instead of raising interest rates. "Job gains have been strong, on average, in recent months, and the unemployment rate has remained low".
Wednesday's quarter-point increase, to a range of 2.25 per cent to 2.5 per cent, lifted the Fed's benchmark rate to its highest point since 2008.
There were no dissents in the policy decision, it added.
Fed officials are also now forecasting two rate hikes for 2019, instead of three. But consider: policymakers' first public estimates of the "longer run" federal funds rate ran from 3.75 to 4.5 percent. The Nasdaq is seeing the smallest losses, down around 0.45%. Those concerns were reflected in a broad-based stock market sell-off, a lower 10-year Treasury yield, and a flatter yield curve. Presidents in recent times, including Trump's predecessors Barack Obama and George W. Bush, have refrained from overtly criticizing the central bank.
Stephen Innes, head of Asia-Pacific trade at OANDA, said the "Fed delivered a dovish hike, but clearly, there wasn't enough affirmation in the statement that the Fed was close to pausing or ending their interest rate hike cycle sooner than expected". "Powell has a chance to modulate his comments to basically try to correct any market misperception about what the Fed was trying to say". Preventing Powell from serving his four-year term would challenge the integrity of the institution, which relies on its reputation of being an independent body, free of the White House's politics.
"Political considerations have played no role whatsoever in our discussions or decisions", he said.