The Federal Reserve (Fed) in its 21/22 Mar 2023 Federal Open Market Committee (FOMC) meeting, unanimously agreed to keep to its rate hike pace of 25bps, same as Feb FOMC, lifting the Fed Funds Target Rate (FFTR) to 4.75%5.00%. This is the highest level of FFTR since Sep 2007.”

“In the monetary policy statement (MPS), the Fed kept its text on the economy, was more bullish on labor market but it included a mention about the US banking system and more importantly, a key part of the FOMC statement has been adjusted to: ‘the Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time’ which sounded less assertive compared to the previous statement that ‘ongoing increases in the target range will be appropriate’ (in the Feb FOMC).”

“For the Dotplot, the median terminal rate forecast was unchanged at 5.1%, and only one Fed official put his/her dot below 5%, with most of the members’ dots coalescing just above 5%, suggesting expectations of at least one more 25-bps hike at this juncture, while seven members expect 50 to 75 bps of hikes. And for the Summary of Economic Projections (SEP), while the FOMC members remained concerned about near term inflation pressures, growth outlook is increasingly weighted on the downside, implying more negative impact from its rate hiking cycle.”