CIBC Research discusses its reaction to today's FOMC policy statement.

"Nothing to see here folks, as the Fed delivered the highly anticipated quarter point rate hike, and didn’t yet opt to signal a pause or give any solace to markets that are pricing-in rate cuts for the second half of the year. It retained its prior wording that referred to the need for “ongoing increases” in rates ahead, which given the use of the plural term “increases”, implies that they still think there’s more than one hike to come. That could be an effort to push the bond market towards higher yields in the here and now. We expect Powell to emphasize at the press conference that the FOMC is not contemplating an easing in policy this year. But he will have to admit that inflation is retreating faster than the central bankers had anticipated without having yet seen any opening in labour market slack," CIBC adds.

"That fact is one key to our view that there’s only one further 25 bp hike ahead, as the FOMC will be less willing to deliver as much economic pain as it might previously have thought would be necessary should inflation run at the more moderate pace we’ve been seeing in the last 3-6 months," CIBC adds.