The Federal Reserve raised interest rates by 75 basis points versus the expected 75 basis points.
The former was 1.50-1.75%.
Unanimous vote.Recent indicators of spending and production have fallen.
Job gains have been solid in recent months.
He reiterates that the FOMC is “extremely concerned with inflation risks”.
He reiterates that the FOMC is “strongly committed to returning inflation to its 2 percent target”.
The balance sheet reduction continues as planned funds the final Federal Reserve.
Odds are at 90.6% against 75 basis points and 9.4% against 100 basis points. Prior to the decision, the market was close to 50/50 at another 75 basis points in the September 21 meeting and the rest at 50 basis points but some tail risks towards 100 basis points.
The two lines in the statement that will get the most attention are the changes to the June comment that “the committee is highly concerned about inflation risks” and that the Fed “expects that continued increases in the target range will be appropriate.”
There was some speculation that it could be mitigated but that hasn’t happened. .
The statement offers very little new information or indications on what will happen in September and beyond, so we will have to wait for Powell.