Federal Reserve meeting led to a quarter-percentage-point increase in Fed funds rate on Tuesday, bringing the rate to 3%, the highest level in three and a half years. Fed followed through with its ’measured’ increases despite an obvious slowdown in the US economy, and in the statement issued after the meeting reiterated its commitment to its "measured" pace of interest rate hikes.

The current level of 3% is only half of the recent peak of 6.5% set in 2000. However, this is the highest rate since Sept. 11, 2001 terrorist attacks.

The discount rate that banks have to pay to borrow directly from Fed has risen to 4%. The prime rate that drives rates for most consumer and business loans has peaked to 6%.

The telltale mistake in Fed’s original version of its statement included the omission of its key saying about inflation. The first version of the Fed statement contained such words about inflation: "Pressures on inflation have picked up in recent months and pricing power is more evident."

The omitted sentence that was brought to the public’s attention some two hours after the release of the first version said, "Longer-term inflation expectations remain well contained."

Fed also indicated expectations of a slowdown in consumer-spending growth due to soaring energy prices and gradual pace of improvement in energy prices.