Fed policy outlook: the FOMC hiked rates another 25 bps

Fed policy outlook: the FOMC hiked rates another 25 bps to a 4.675% mid-band rate, as fully expected. And it looks as though one more quarter point hike will be seen at the March 21-22 FOMC. The policy statement repeated that ongoing rate increases (note the plural) will be appropriate and Fed Chair Powell repeated that too. He stressed that the labor market remains "extremely tight" and that inflation remains "well above our longer-run goal." The full effect of the hikes has yet to be seen risks of not doing enough continue to outweigh the risks of overtightening. And he reiterated that rates will need to stay restrictive for some time. Those are as close to stating the Fed will boost rates again in March without exactly saying so. Analysts expect a 25 bp increase at the next meeting, which will also include new forecasts and dots. Powell would not say whether the December dots were still valid. Analysts suspect some of the more aggressive hikes projected for this year will be toned down. This should be the last of the hikes this cycle with the chance of a 25 bp easing at the end of the year.