Federal Reserve Building

US 2-year yields were trading at 4.71% ahead of the FOMC and USD/JPY was trading at 129.35.

The kneejerk reaction in the market is moderately hawkish, with the dollar rising. The Fed is continuing to pledge 'increases' (plural) in rate hikes, which would get the Fed funds rate above 5% versus the 4.91% priced into the market.

The March meeting is priced in at 85% with the remainder at no change. There's nothing in the statement to indicate a halt in rate hikes or any kind of change in stance however, the change from 'pace' to 'extent' indicates something a tad less hawkish and that might be enough for the market.

We will have to wait for more clarity from Powell at the bottom of the hour.

Here's the redline:

Fed redline