TLDR: The Fed hiked by 50 basis points as expected this morning, but Fed Chair Jerome Powell downplayed the chances of a 75 basis point hike next time, which some had feared/hoped for as the world’s biggest central bank scrambles to control US inflation running at over 7%.
Stocks rallied sharply on relief a bigger hike was unlikely next month. Go figure. I agree with those who see this tightening, which is the fastest in more than 20 years, is a mistake that will drive the United States, Europe and China closer to recession next year and prompt a plateauing or even a reversal in those rates late this year and next year. Paid subscribers can see more on this below the paywall fold.
Elsewhere in the news here and overseas overnight:
Hungary’s Victor Orban, who is an authoritarian fan of Vladimir Putin, is blocking Europe’s plan to cut itself off from Russia’s oil;
Queenstown Lakes District Council’s senior planner rejected Peter Thiel’s resource consent application for a 330m-wide ‘cabin’ on a hill overlooking Lake Wanaka; and,
Simon Bridges recommended politicians avoid focus-groups and being so poll-driven as he announced his next job will be as a podcaster for Stuff.
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