US Fed Hikes By 75 BPS, Markets Under Pressure On The Back Of Hawkish Commentary

Global markets are under pressure as the Fed hiked rates for a third consecutive time by 75 basis points. US markets fell 1.7% to 1.8% across indices with US Futures down a further half percent. Markets are now factoring the terminal rate of the Fed to reach 4.6% by 2024 and the dot plot suggests that some members are in favour of hiking even further. The Fed Chair himself admitted that a risk of recession is likely and that growth and unemployment will be the bi-products of this rate hike cycle and to stem high inflation. That being said, he clearly signalled that rate hikes will continue till inflation comes back down to 2%.