Fed hikes rates and revamps forward guidance in dovish direction

The Federal Reserve on Wednesday raised its key interest rate and revamped the guidance in a dovish direction. The quarter percentage point move puts the Fed’s benchmark rate in a range of 5%-5.25%. This is just below the prior peak of rates before the Great Recession of 2008. The Fed reworked its language, scrapping prior language that “some” additional hikes “may” be needed. The pivotal forward guidance now says: “In determining the extent to which additional policy firming may be appropriate to return inflation to 2% over time, the FOMC...