Federal Reserve hikes rates by 25 basis points, as expected

• The market priced in a 90% chance of a 25 bps hike
• Prior rate was 4.75-5.00%
• This
• Previous statement said "The Committee anticipates that some additional policy firming may be appropriate"... that has been removed
• Previous statement said "recent indicators point to modest growth in spending and production", now says "Economic activity expanded at a modest pace in the first quarter"
• Previous statement said "Job gains have picked up in recent months and are running at a robust pace" now says "Job gains have been robust in recent months, and the unemployment rate has remained low"
• Previous statement said "Inflation remains elevated" and that's unchanged
• Vote was unanimous

The line about anticipating some policy firming has been removed and now the key guidance paragraph says:

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5 to 5-1/4 percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, 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. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.

So there's still a hiking bias here but no longer an explicit nod to future hiking. This is precisely how I expected it would go in my FOMC preview. The initial reaction is dovish with the dollar falling and stocks doing a bit better. It's not a big surprise but this is as clear of a pausing signal as anyone could have hoped for.

Powell will hold a press conference at the bottom of the hour.

The FOMC is composed of twelve members, including the seven members of the Board of Governors of the Federal Reserve System, the president of the Federal Reserve Federal Reserve The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the Read this Term Bank of New York, and four of the remaining eleven Reserve Bank presidents, who serve on a rotating basis. The committee meets eight times a year to review economic and financial conditions, determine the appropriate stance of monetary policy, and assess the risks to its long-run goals of price stability and sustainable economic growth.

An FOMC decision refers to the outcome of these meetings, during which the committee sets key interest rates and decides on the overall direction of monetary policy. The FOMC can influence interest rates by setting the federal funds rate, which is the interest rate at which banks lend reserve balances to other banks on an overnight basis. Changes in the federal funds rate can impact other interest rates, credit conditions, and overall economic activity. The FOMC may also implement other policy tools, such as quantitative easing Quantitative Easing Quantitative easing (QE) is a monetary policy in which a central bank buys government bonds or other financial assets in order to inject money into the economy to expand economic activity.One of the byproducts if not goal of QE is to help drive down the value of a currency, thereby making one’s exports, equities, and other products more affordable on a global stage.QE is considered an unconventional form of monetary policy and is usually used when inflation is very low or negative or when standa Quantitative easing (QE) is a monetary policy in which a central bank buys government bonds or other financial assets in order to inject money into the economy to expand economic activity.One of the byproducts if not goal of QE is to help drive down the value of a currency, thereby making one’s exports, equities, and other products more affordable on a global stage.QE is considered an unconventional form of monetary policy and is usually used when inflation is very low or negative or when standa Read this Term or forward guidance, to influence economic conditions.

FOMC decisions are closely watched by financial markets, as they provide insight into the future direction of monetary policy and can influence asset prices and market sentiment.

Here's a redline from BMO: