The US Federal Reserve hiked its fed funds policy range by 75bp to 1.5-1.75% with Chairman Jerome Powell indicating that another hike of 50-75bp is likely in July. The rate hike magnitude was the biggest increase in any meeting since 1994. Powell added, “Clearly, today’s 75 basis-point increase is an unusually large one and I do not expect moves of this size to be common”, citing inflation expectations alongside the record jump in May’s CPI to 8.6%. Prior to the data release, expectations were for a 50bp hike with only a 3% probability for a 75bp hike. However, once the CPI print showed an unexpected rise, market participants started pricing in a 75bp hike with a probability of over 90% as per CME data. The table below helps compare the June and May statements by the FOMC.