The Federal Reserve raised rates by triple-sized 75 bps as expected. There are further rate increases to come, economists at Commerzbank report.

Inflation is a priority

“The Fed took its third big rate step in a row, raising rates by 75 bp to 3.00%-3.25%.” 

“The central bank held out the prospect of further significant rate hikes and is apparently prepared to accept a recession if this is necessary to combat the high inflation.”

“Powell made it very clear again that the Fed is giving priority to fighting inflation. As a result, key rates are likely to rise much higher than most observers and the Fed itself had originally expected. These steps will probably take place quite quickly.”