HAWKISH HIKE

To no one’s surprise, the Fed raised rates 25bps. The more important issue: what follows. Since the Fed began using fed funds as its primary method for shaping rates back in the 1990s, only once has there ever been a one-and-done rate hike. Moreover, the press release read rather hawkish as it mentioned inflation being “elevated” and not being driven exclusively by energy. Two more hikes before this cycle ends.