Comments on the March 16 Fed Meeting

The Federal Reserve has laid out an aggressive plan for policy normalization for the rest of the year and into 2023. The committee expects six additional rate hikes this year and three more in 2023. And they seem quite optimistic that economic growth will not be impaired by this pace of tightening. In fact, during the press conference Chair Powell made the comment that the economy should not only be able to withstand, but even continue to flourish, despite this tightening ahead. For our part, we are a little more circumspect as we see a number of risks on the horizon, and we do not dismiss the possibility, in fact, we believe it's quite likely, that the committee will have to reassess and perhaps recalibrate lower the number of rate hikes that they will deliver, not in the immediate future, but perhaps in the third quarter or by the end of this year.

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