The Fed just made its first double-size rate hike in 22 years, and it's very likely more will follow, Powell says
on Wednesday issued its first double-sized rate hike since 2000. It probably won't be the last one this year.to a range of 0.75% to 1%, up 0.5 percentage points from the previous range's limits. The increase was twice the size of the quarter-point rate hikes typically used by the Fed and reflect a markedly more aggressive policy strategy to cool inflation.
"There is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings," Powell told reporters."The American economy is very strong and well-positioned to handle tighter monetary policy." The forward guidance confirms what markets have been betting on for weeks. Traders are largely pricing in 0.5-point hikes to be announced at the FOMC's June and July meetings. Forecasts for the September policy decision are much more varied but still point to another double-sized increase. That would place the upper limit of the benchmark interest rate at 2.5%, sharply higher than the 0.25% limit seen as recently as early March.
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