Fed Hikes 75 Bpts to 3.75-4.0%, Pivots Even More Hawkish: “Very Premature to Be Thinking about or Talking about Pausing.” Markets Tank | Wolf Street

The FOMC voted unanimously to raise its target for the federal funds rate by another 75 basis points – the fourth rate hike of this magnitude in a row – to a range between 3.75% and 4.0% – unimaginable a year ago. The rate hike was expected, and had been projected by the Fed at its September meeting.But then during the press conference, Powell pivoted further into the hawkish direction, and repeatedly, and purposefully, and all heck broke loose in the markets, and he kept hammering on it, and concluded with it, to where there would be no misunderstanding and no misinterpretation.

Today’s rate hike was projected at the FOMC’s September meeting in the projection materials at the time. The “dot plot” indicated at the time that the Fed would raise by another 125 basis points by year end: so by 75 points today (done) and by 50 basis points at its December meeting, which would take the upper end of the range to 4.5%.

QT will continue at full speed as previously outlined. The Fed considers it an important tool in cracking down on inflation, Powell said at the press conference. This is a tacit admission – which must never be spoken out loud during the press conference, neither by the press nor by Powell – that the huge bout of QE had something to do with this raging inflation, and that this huge bout of QE will now have to be undone.

Fed Hikes 75 Bpts to 3.75-4.0%, Pivots Even More Hawkish: “Very Premature to Be Thinking about or Talking about Pausing.” Markets Tank | Wolf Street