Watch Jerome Powell’s press conference after the latest market-moving Fed rate hike

NatWest strategist says Fed’s statement so far is a “hard-hitting surprise”

“So far, it’s aggravating,” said John Briggs of NatWest Markets. Besides boosting expectations for the final interest rate above 5%, only two Fed officials were in their forecasts below 5%. “This is a hard surprise. It’s not like it’s a scattershot bunch. I think we’re seeing a delayed reaction. We need to see how Powell distinguishes it.” He also said that the increase in the forecast for core personal consumption expenditures – the central bank’s preferred measure of inflation – was a surprise.

– Patty Dom

The Fed’s statement hasn’t changed much from November

The latest policy statement from the FOMC hasn’t changed much from the November release.

Notably, the central bankers left out language that “the committee expects that continued increases in the target range would be appropriate.” Traders could see this as a bullish sign.

Check out the full data comparison here.

– Jesse Pound

Fed sees ‘final interest rate’ at 5.1%

The Federal Reserve indicated on Wednesday that it sees its so-called final interest rate — or high water mark for the federal funds rate — at 5.1%. At this point, officials will likely pause to allow the impact of monetary policy tightening to work its way through the economy.

The consensus then pointed to a full percentage point worth of interest rate cuts in 2024, bringing the funds rate to 4.1% by the end of that year. Another percentage point of cuts follows in 2025 to a rate of 3.1%, before the benchmark settles at a long-term neutral level of 2.5%.

– Jeff Cox

The Federal Reserve raised interest rates by 50 basis points, as expected

Inventories rise ahead of the Fed’s decision

US stocks traded higher ahead of the Federal Reserve’s latest policy announcement. The Dow Jones Industrial Average rose 227 points, or 0.7%. The S&P 500 and Nasdaq Composite Indexes also jumped 0.7%.

For more information on how to trade the stock market, check out our live markets coverage.

– Fred Imbert

A potential change in the Fed’s ebb and flow and what it means for some winning ETFs

The tide of inflation and Fed rate hikes finally appears to be turning, which means some investors may want to reevaluate some of the strategies that worked in 2022.

A surprisingly soft CPI report led to a decline in yields on Tuesday. And while the Federal Reserve is expected to raise interest rates by half a percentage point on Wednesday, traders will be looking for clues as to whether the central bank will halt its increases next year.

That could put pressure on a group of ETFs designed to combat inflation or rising prices — or both — that have attracted significant investor interest this year.

Check out our full list on CNBC Pro.

– Jesse Pound

The Fed has to walk a fine line

The Fed has yet to tread well, trying to slow the pace of rate hikes while signaling that the fight against inflation is far from over.

“I don’t think they can claim any wins on inflation yet. I think they’re going to be very careful before they can do that,” said Anita Markowska, chief financial economist at Jefferies. Earlier this year, she said it appeared inflation was peaking. “It looked like it was over, and it roared back.”

– Patty Dom

What do you expect from the Fed?

The Federal Reserve is due to make its final policy decision for 2022 in less than an hour.

The central bank is widely expected to raise interest rates by 50 basis points, or half a percentage point, after four consecutive increases of 75 basis points. Chairman Jerome Powell is also scheduled to hold a press conference after the Fed’s announcement, and investors will be looking for clues about what the central bank will do next – especially after the latest CPI report showed signs of slowing inflation.

In addition, the Fed is set to release its latest “dot chart,” which shows where central bank officials expect rates to be over the next few years. Investors will comb through that data to gauge where the so-called final rate — the high water mark of rates — is.

Fred Imbert, Jeff Cox

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