We had a saying on the sell-side to describe companies that would continually lower guidance each quarter rather than get all of the dirt out in the wash at once (this was pre-2005 before companies mastered the art of guidance). The Federal Reserve did not get the memo. The Fed raised its policy rate by 75 BPS today to a range of 3.00-3.25%. Too little to late. Further, the Fed continued to inch up estimates for inflation (Core PCE and PCE) as well as unemployment, while reducing its Real GDP outlook (table below).

If we assume the Fed is undershooting on its Fed Funds Rate projections, it is safe to say that the 2023 Fed Funds Rate will peak above 5.00%.

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