The Fed's monetary policy committee voted unanimously 12-0 to raise interest rates by 0.25% to a range of 3.75-4.00%. The Dot Plot report indicates that 16 of the 18 Fed officials expect one more rate hike this year, which means rates of 4.00-4.25% are fairly certain. Kan Hataisattha, Head of Investment Strategy for the Retail Client Research Group at CGS International Securities Thailand, said the Fed stressed that 2% inflation is its absolute mandate, with the committee having clear objectives on maximum employment, price stability, and U.S. economic growth. He noted that geopolitical factors, especially the situation between Iran and the United States, have contributed to a shift in the Fed's outlook. He also said rates should stop around 4.50% at most, but if they rise to 5.00-5.25%, it would be time to stay on the sidelines.
Fed unanimously raised the effective federal funds rate by 0.25% to 3.75-4.00%, with another hike expected this year.
Fed rate hike and signals of further tightening push Treasury yields higher, lifting the 10Y yield.
