Kiplinger - What happens after the latest Fed rate hike?

"Markets were hoping for a more explicit acknowledgement that the Fed might be near the end of the tightening cycle, at least ITS MOST AGGRESSIVE phase. This didn't quite happen, although the Fed included a key sentence that will keep this hope alive: it was careful to point out that they remain very dependent on incoming data. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. Markets will continue to probe on this front and hope that if not this time, the Fed may well pivot next time. This is good because it shows the economy is cooling off faster than perhaps the Fed had assumed. The time between the last hike and first cut is usually not very long: 9 to 12 months. If the above relationship is right, this time should be no different. It's reasonable to expect the first cut to happen late in 2023 or at the latest by Q1 2024." – Jan Szilagyi, CEO and co-founder of Toggle AI

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