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The Fed's long term project

The #fed concluded yesterday the last #fomc meeting of the year, with a 50 bps interest rate hike, meeting expectations. Perhaps the most notable conclusion the Fed transmitted yesterday is their commitment to fight inflation and to keep hiking until #cpi goes back to 2%. However, in the press confernece, Powell left the door open to a potential upward revision of this inflation target as part of a “long term project”. The bottom line is: the fed expects the terminal rate to be around 5.1%, above market expectations, and the market has priced in the fed will cut internet rates as soon as set 2023. Following Fed actions, today the #snb increased rates by 50 bps to 1%. The #ecb and #boe also hiked today by 0.5%. Central Banks keep tightening.


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