• Hiked its benchmark interest rate by 75bp with the fed funds target range now at 3.00-3.25%
  • Recent indicators point to modest growth in spending and production
  • End-2022 median dots now at 4.4% vs. 3.4% after its June meeting, a 100bp upward revision
  • End-2023 median dots now at 4.6% vs. 3.8% after its June meeting
  • Longer-run median dots were unchanged at 2.5%
  • US GDP revised lower vs. June’s forecasts at 0.2%, 1.2%, 1.7%, 1.8% for 2022, 2023, 2024 and 2025
  • Core PCE inflation expected at 4.5%, 3.1%, 2.3% and 2.1% for 2022, 2023, 2024 and 2025
  • Unemployment rate revised higher than June’s forecasts at 3.8%, 4.4%, 4.4% and 4.3% for 2022, 2023, 2024 and 2025
  • FOMC moving towards “sufficiently restrictive” rates and to “keep it there for some time”
  • Rates currently are at the “lowest level” of what would be restrictive
  • The committee was split between a 100-125bp hike over the remaining two meetings in 2022
  • Inflation has not eased despite “supply side” healing – the Fed is taking forceful and rapid steps to moderate demand. Unsure about recession odds
  • Powell said that his stance has not changed from what he spoke at Jackson Hole in August
  • Labor market is currently very tight despite slowing growth – expects some softening next year
  • Long-term inflation expectations are anchored well and will be a positive factor in guiding policy
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