Fed’s meeting interpretations from the experts…

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The next step might be 50 basis points.
More hikes are coming.
The terminal rate is going to be higher.
Fed is trying to give investors hope by slowing of rate hike pace but not pivoting at the same time.
It takes 9-12 months for rate hikes to be felt and 12-18 months for the maximum effect. It makes sense to slow down the current pace given we are only eight months past the first rate hike.
Fed will want slower total and core inflation, pullbacks in house prices and rents, slower wage growth, lower job openings, and likely an increase in the unemployment rate prior to a real pivot.
Fed is also concerned about the upcoming winter heating season that may cause another spike in energy prices.
Rate hikes are likely to continue into 2023 in smaller increments.

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