CIBC Research discusses its reaction to today's FOMC policy decision.
"The Federal Reserve delivered the 75bp rate hike that was widely expected, alongside updated dot plot forecasts that show policymakers believe there is still a long way for interest rate to go to combat current inflationary pressures. Indeed, a larger than expected increase in the median dot plot projection for the end of this year (now 4.4% vs 3.4% previously) suggests that policymakers are planning further oversized hikes at the next two meetings, with that change in projection seeing two year yields rise even higher immediately after the decision," CIBC notes.
"Today's 75bp move brought the target range for the fed funds rate to 3.00%-3.25%, with the statement still pointing to "elevated" inflation due to supply/demand imbalances and that ongoing rate hikes will be appropriate. This despite only "modest" growth in spending and production. The vote was unanimous," CIBC adds.