U.S. policymakers tempered the level of their latest rate hike increasing it only by 0.5%, which now brings the benchmark rate to a 4.25% to 4.5% target range. This follows on from four consecutive 0.75% hikes that have supercharged the pace of rate hikes. Jereme Powell’s speech sapped all expectations of a dovish pivot, explaining that the Fed is not close to ending its fight against inflation. The stance on monetary policy needs to remain restrictive and for longer to return inflation back to 2%. Policymakers now project the terminal rate to reach 5.1% by the end of 2023 vs the 4.8% that had initially been speculated by investors. The forward trajectory of interest rates will continue be data dependent leaving policymakers with the flexibility to either deliver another 0.5% rate increase or downshift to 0.25%. A more hawkish tone from the Fed pushed European stocks lower and US equity futures also point to a decline.