Is the Fed done with hikes?

📌 On Wednesday, Fed Chair Jerome Powell hinted that the central bank might be done with its ultra-aggressive tightening policy as it kept rates stable in the range of 5.25%-5.50% for two meetings in a row. He also stated that slowing down allows policymakers to understand better “how much more we need to do, if we need to do more”. Fed Officials declared that recent rises in longer-term Treasury yields reduced the need to hike again.

📌 How did the markets react? Stock markets closed higher, while the 10-yr US bond went below 4.75%, after having hit the 5% threshold a few days before. With the inflation still above the 2% target, Powell declared that decisions will be taken “meeting by meeting” according to what data will say. Finally, the Fed will keep monitoring tensions in the Middle East and how they will affect the economy.

Source: Bloomberg