The Fed has not made any changes to the current interest-rate policy, but we can see a clear move toward raising interest rates more quickly.
There are now seven Fed members predicting a hike in 2022 vs. four who did so previously. Thirteen Fed members also now see a hike in 2023 vs. seven who did so previously.
Fed Chief Jerome Powell's press conference is coming up, and he will be talking about inflation. Whether it is "transitory" or not, it is still going up, and the Fed now predicts it will be nearly a full percentage point higher in 2021.
This is not market-friendly news from the Fed, but it is not totally unexpected. It is offset to some degree with predictions of better growth, but it is likely we will see more rotational action in the weeks ahead and market participants reposition.
The market sold off sharply on the headline news but has already bounced back to a great degree. There has been an inclination to embrace Powell's comments about the transitory nature of inflation, so we will see if he can soothe emotions once again.
This is not good news, but it has already been discounted to some extent. The bond reaction is muted, and the iShares 20 Plus Year Treasury Bond fund (TLT) is still above yesterday's low.
I'll be looking for some stock-picking once the reaction to the headline news slows.
This story has been updated.