Federal Reserve interest rate decision: 25 bps rate hike to 5.25-5.50%

<ul><li>25 bps rate hike</li><li>economic activity has been expanding at a moderate pace (vs modest pace prior)</li><li>Repeats forward guidance that refers to "the extent of additional policy firming that may be appropriate"</li><li>No other changes to the statement</li></ul><p>This statement is virtually identical to the prior one, save for the shift to a 'moderate' pace of growth from 'modest'. I thought the Fed may change the line that "inflation remains elevated" to indicate some progress but it's the same.</p><p>The implicit signal here is that the plan is to continue hiking at every-other meeting and the market is pricing in a 16% chance of a hike in September and 40% chance in November.</p>

This article was written by Adam Button at www.forexlive.com.