“If we think it’s appropriate to raise [by a half point] at a meeting or meetings, we will do so,” said Federal Reserve chair Jerome Powell.
Risk assets sank as market participants relegated the likelihood of a much more hawkish monetary policy going forward.
Markets are now pricing in a 72% chance of a 50 bps hike in May and 65% chance of a 50 bps hike in June.
Rate hike odds in September and December rose also.
With this being said, the near-term hawkishness is expected to end in 2023 as rate cuts are priced in.