- The market was pricing in 81% of a 25 bps hike before the decision while the vast majority of economists were also predicting a hike with a handful predicting no change or a cut
- Prior rate was 4.50-4.75%
- Ahead of the decision, the market was pricing in a year end target rate at 4.36%, that's fallen to 4.26% since
- May 3 meeting was priced at 4.93% before the meeting, now up to 4.96%
- Year-end dot unchanged at 5.1%
- Fed statement deletes reference to 'ongoing increases' in rates
- US banking system is sound and resilient
- Recent developments are likely to result in tighter credit conditions but extent of effects is uncertain
- FOMC anticipates 'some additional policy firming may be appropriate'
The US dollar is lower across the board on the headlines as the market knee-jerks as dovish reaction. On the dot plot, it's notable how broad the consenus is at 5.00-5.25% as the year-end level. It will be interesting how hard Powell pushes on the idea of staying there through year end.
Here's a redline of the FOMC statement from @newsquawk.
The market was pricing in 81% of a 25 bps hike before the decision while the vast majority of economists were also predicting a hike with a handful predicting no change or a cut
