Jerome Powell to Kerry Craig: Expert take on US Fed's hawkish comments

The Federal Reserve on Wednesday signaled it is likely to raise US interest rates in March and reaffirmed plans to end its bond purchases that month as well before launching what was characterized as a significant reduction in its asset holdings. 

There’s a risk that the high inflation we’re seeing will be prolonged, there’s a risk that it will move even higher. We have to be in a position with our monetary policy to address all of those plausible outcomes

Jerome Powell, Chairman, US Federal Reserve 

The stock market is especially vulnerable to higher rates and the removal of the tailwind that the Fed’s asset purchases have provided for the past two years

Chris Zaccarelli, CIO, Independent, Advisor Alliance

While rising rates are lik-ely to continue to press-ure highly valued parts of the equity market, we don’t see the Fed over-tightening and risking economy or a recession

Kerry Craig, Strategist, JPMorgan Asset Management 

Fed rate hikes are coming, but the Fed is likely to ta-ke a measured approach to avoid sharp market declines in equity prices. This is less bearish for equity than some feared 

Jason Schenker, President, Prestige Economics 

The market is trying to get a better handle on how fast the Fed will let the size of the balance sheet run off as liquidity will then get pulled out of the market

David Sekera, Chief US market, strategist, Morningstar

The statement and particularly Powell’s presser were quite hawkish: opening the door to 50-bp hikes and possibly hiking at every meeting

Mike Schumacher, strategists Wells Fargo 

The January FOMC meeting reinforces our view that the Fed will likely need to hike more than the market is currently pricing

Ethan Harris, Head of global economics at Bank of America Global Research