Fed Lifts Rates by 0.75% for Fourth Straight Meeting By

By Yasin Ebrahim

-- The Gold exchangeFederal Reserve raised interest rates by three-quarters of a percentage point Wednesday for the fourth time in row, pushing monetary policy further into restrictive territory to combat above-trend inflation. 

The Federal Open Market Committee raised its to a range of 3.75% to 4% from 3% to 3.25% previously. 

"The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time," the Fed said in a statement.

The latest hike moved the Fed’s benchmark rate closer to levels that many believe are close to a peak, or so-called terminal rate.

The Fed’s latest projections, released at the September meeting, showed that central bank members favored lifting rates to 4.4% by the end of the year, and to a peak of about 4.6% in 2023.

Some believe, however, that the Fed may not need to reach the upper end of the rate projections as there’ll likely be evidence of a slowing economy in the coming months, reviving the focus on a possible recession.  

“It could be the final hike of the year, or there might be 25bps hike in December, because by the end of the year, I think there'll be enough of a sign of a real slowdown that they don't need to do it and the risk will be even more two sided than it is now,” Chief Strategist at Spouting Rock Asset Management Rhys Williams told ’s Yasin Ebrahim in an interview on Tuesday. 

The Fed has, however, highlighted that the pace of hikes would be data dependent. But the latest data continue to point to a robust labor market, and inflation that remains sticky. 

Traders will shift attention to Powell's press conference at 14:30 ET (18:30 GMT), for more clues on the path of monetary policy. 

Powell is likely to face several questions on the potential for a slowdown in the pace of rate hikes – a growing narrative that played a major role in the recent rally in stocks and could spark a reversal if the Fed chief pushes back. 

“I think the markets need to see some inclination that the rate increases are about to slow,” Williams added. “My guess is that is still going to happen, but there’s certainly more downside for stocks from Powell not saying that, then upside from him saying that.

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