by Tyler Durden at ZeroHedge
Tl;dr: The Fed hiked rates by a stunning (but expected) 75bps – the biggest hike since 1994. Esther George dissented (preferring 50bps). Fed expresses that is “strongly committed” to fighting inflation.
The Fed sharply raised its rates outlook (to meet market expectations) and sharply lowered its growth and employment outlooks.
The last time the Fed hiked 75bps, we got the ‘Tequila Crisis’ and The IMF had to bail out Mexico.
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Since the last FOMC statement on May 4th, all hell has broken loose in global capital markets (and economies).
US equities have collapsed (Nasdaq -15%) and US Treasury yields have exploded higher. Gold is down around 3% since the last FOMC, mirroring the 3% or so gain the USDollar Index…(NOTE everything shifted after last Friday’s CPI)
Source: Bloomberg
The ugliness in bond-land was led by the short-end (with 2Y yields up almost 60bps since the last FOMC and 30Y yields up 40bps)…
Source: Bloomberg
…pushing the yield curve back into inversion once again…
Source: Bloomberg
While the last FOMC statement crowed of the underlying strength of the US economy, macro data has dramatically and serially disappointed in the month or so since…
Source: Bloomberg
Rate-hike expectations overall have soared higher since the last FOMC statement, mostly driven in the last week post-CPI…
Source: Bloomberg
With the market now pricing in 100% odds of 75bps today and in July, and 40% chance of 75bps in September too
Source: Bloomberg
Today will also see the release of new forecasts by Fed members. The current market expectations are dramatically above The Fed’s last dot-plot, so we expect significant changes…
Source: Bloomberg
Here’s what The Fed did:…
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