I believe that the Fed will hike by 75bps this time nut hint to the market that future hikes will be less steep. The US economy (and indeed the world economy) is clearly headed into a recession. Look no further than the crashing freight rates and the accelerating trends of retrenchment happening in the US. Not to mention the signs if weakening in the real estate sector. 

The Fed can clearly not sustain the current path of high interest rates. Not least because it can hardly afford it (literally). At the current interest rates, the US government is paying US$735.6bn in interest payments. Very soon the amount will be US$1trn. This is money that is better spent on health care, education or infrastructure. According to the US Congressional Budget Office forecast, the US government will spend more than $8 trillion in interest over the next decade, nearly 11 percent of its total spending. For context, in 2032, the feds will pay more in interest than for any other federal program, except for Social Security and Medicare. CBO projects the federal government will pay $200 billion more in interest than it will spend for national defense, assuming no changes in policy.

Externally, the higher interest rate differential with the Euro and Japan is also clearly causing the Euro and the Yen to crash. If the rate hikes continue, there will be serious economic consequences for these economies which may in turn have contagion effect on US exposures to these economies possibly creating GFC like impact.

In short neither the US nor the rest of the world can afford higher rates for much longer. This could be the last 75bps hike we will see in quite a while.