The Fed Hikes Base Interest Rate A Quarter-Point

There were no surprises and it was silly to expect them.

FOMC Statement

FOMC Press Statement: The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:
The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.
Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.
Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.

After the July FOMC announcement I made this call

Unless we see some very good inflation data in the next 48 days the Fed is going to hike rates.
There is no August meeting.
I expect a hike unless there is a labor market collapse.

At the Press conference Warsh tried to explain how a pause was a hike. Bond yields surged and I commented The Market Tells Fed Chairman Kevin Warsh “You Blew It Already”

Earlier today, I commented Fed Chairman Tries to Explain Why an Interest Rate Pause Isn’t a Pause
Disingenuous Warsh
I did not expect the Fed to hike today.
But we didn’t expect nonsensical statements as to why a pause isn’t a pause either.
I am pleased to report we have an unfiltered message in real time.
In case you missed the message, here it is. “Dear Fed you blew it already.”

I was surprised by the number of people on this blog and on X who thought the Fed would hold.

This hike has been a base case given for nearly a month.

Live Broadcast of Press Conference

Here is the Live Broadcast of the Press Conference.

Alternatively watch on Youtube below (starts at 2-minute mark).