Fed Hikes Rates Again But Has The Raising Cycle Ended?

Key Takeaways

• The Fed has increased their base interest rate by 0.25%, in line with expectations despite the uncertainty in the financial sector
• Chairman Jerome Powell made a number of comments which suggest the rate hike cycle could be slowing, but made it clear that cuts are not in the plan for this year
• Markets sold off in the afternoon of the announcement, but bounced on Thursday morning with the S&P 500 up around 1.50% in morning trade

If you’d asked just about anyone a month ago what the Fed would do at the next Federal Open Market Committee (FOMC) meeting, a rate hike wouldn’t have been a question. Maybe some would have said 0.25%, a reasonable number would have said 0.50%, but no one would have predicted a pause or a fundamental change to the monetary tightening.

Then banks started collapsing.