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Fed Downshifts to 50bp Hike

#Fed downshifts to a 50bp hike (as expected). They increased the key rate to 4.5%, the highest since 2007. According to Fed median forecast, projected rates would end next year at 5.1% (+50bps beyond the prior median of 4.6%) before being cut to 4.1% in 2024 - a higher level than previously indicated (see FOMC dots below). Prior to the decision, markets were expecting rates would reach ~4.8% in May.


POWELL: LABOR MARKET REMAINS EXTREMELY TIGHT
POWELL: A RESTRICTIVE POLICY STANCE LIKELY NEEDED FOR SOME TIME
POWELL: NEED SUBSTANTIALLY MORE EVIDENCE OF LOWER INFLATION
POWELL: FED STILL HAS SOME WAYS TO GO ON RATE HIKES
POWELL: STANCE ISN'T YET RESTRICTIVE ENOUGH EVEN W/ TODAY'S MOVE
POWELL: NO RATE CUTS UNTIL CONFIDENT INFLATION MOVING TOWARD 2%
POWELL: WILL HAVE TO HOLD RESTRICTIVE RATES FOR SUSTAINED TIME