Technical Assessment: Neutral in the Intermediate-Term

The FOMC kept the fed funds target at 5.25%-5.50%, but continues to say that rates will stay higher for longer. The chances for a 25-basis-point hike at the meeting on November 1 popped to 72% from 31% on Tuesday. In addition, the potential for rate cuts in 2024 has fallen, as the market now sees the funds rate at a target of 5.5%-5.75% by the May 1 meeting next year. We warn investors not to get too hung up on what the Fed does and says. Still, the central bank has a remarkable history of tightening too much and pushing the economy into a recession.