To The Moon

A rate too high?

It was expected. The FOMC is most likely to tail down rate hikes to a milder pace after going gung ho and all out in raising rates for the past few sessions. To be fair, 50 basis points as expected in December is not exactly mild. It is a substantial raise but in the face of sky high inflation and after massive 75 rate hikes one after another, it is a step in the correct direction. Inflation needs to be addressed but the health of the economy is also important. So it is a fine balancing act. 

The FOMC needs to see data going in the correct direction and they are hoping they do. That is important to give them credibility and theability to actually be less hawkish. So if all goes well and inflation comes down considerably and fast, we can expect a more dovish FOMC down the road.