As expected, the Fed held its policy rate unchanged at between 5.00% and 5.25% today, but it made clear in the accompanying statement that pause was only to allow officials to “assess additional information and its implications for monetary policy”. In a hawkish shift, the Fed’s updated projections in the new SEP show the median fed funds rate rising to 5.6% by year-end, which is consistent with 50bp of additional tightening.
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