Justin Greenhill, chief investment officer at Sollinda Capital Management in Miami, said the fixed income derivative market was pricing in over a 90% chance of a 25 bps rate hike, so the move was far from a surprise, while the press conference was "notably hawkish."
Dustin Reid, chief strategist at Mackenzie Investments in Toronto, said the unanimous vote "really speaks" to the committee's conviction, and that one more hike is on the cards for this year.
Wasif Latif, chief investment officer at Sarmaya Partners in Princeton, New Jersey, said the decision was already priced in, adding that the market may be overpricing future hikes.
Michael Gapen, chief U.S. economist at Morgan Stanley in New York, said the Fed raised the policy rate by 25bp to a target range of 3.75%-4.0%, and that the dot plot showed a median of one additional hike this year.
Brad Conger, chief investment officer at Hirtle & Co. in Bryn Mawr, Pennsylvania, said the unanimous hike could mark the moment when the FOMC "regained a measure of spine."
Phil Blancato, chief market strategist at Osaic in New York, said the bigger driver of the market reaction would be what the Fed signals about the path forward.
Karen Manna, fixed income strategist at Federated Hermes in Pittsburgh, said Treasury yields had already moved sharply higher as investors repriced inflation risk and higher-for-longer rates, making today's 25 basis points less important than what comes next.
Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina, said markets are handling the move remarkably well, while Juan Perez, director of trading at Monex in Washington, D.C., said the unanimous vote pointed to a very hawkish approach and likely another move in December.
Daniel Siluk, head of global short duration and liquidity at Janus Henderson Investors in Newport Beach, California, said the statement was "subtly but meaningfully hawkish," with policymakers upgrading their description of the economy.
JP Powers, chief investment officer at RWA Wealth Partners in Boston, said the front end of the curve is still worried about another hike later this year.
David Krakauer, vice president of portfolio management at Mercer Advisors in San Diego, said the shift from a 9-3 hold in July to a unanimous 12-0 hike was the real story and materially raised the probability of another move before year-end.
Matthias Scheiber, head of the multi-asset team at Allspring Global Investments in London, said the move was well telegraphed and may lend the FOMC additional credibility, while Steve Sosnick, chief strategist at Interactive Brokers in New Canaan, Connecticut, said the decision addressed concerns that Warsh might not be prepared to act.
Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska, said the Fed hiked for the first time in more than three years, and that the unanimous vote showed the Fed is serious about combating the broadening inflation backdrop.
Christopher Hodge, chief U.S. economist at Natixis in New York, said staying on hold would have risked credibility, while Karl Schamotta, chief market strategist at Corpay in Toronto, said the decisive hike should help restore confidence in the Fed's commitment to fighting inflation.
Kay Haigh, global head and CIO of fixed income and liquidity solutions at Goldman Sachs Asset Management in New York, said one more hike this year in December is the base case, contingent on upcoming CPI reports and energy prices.
Michele Raneri, vice president and head of U.S. research and consulting at TransUnion in Chicago, said the decision reflects continued focus on persistent inflation, while Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said he would not bank on another hike this year.
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