Fed hikes rates by 25bps to 3.75%-4.00%, signals hawkish stance

English summary

The Fed raised the federal funds rate to 3.75%-4.00%, its first hike since 2023. While anticipated, the unanimous vote, upgraded growth forecasts, and Chair Warsh's comments on insufficient financial tightening signal a more hawkish policy. Markets focus on the ~5% 10-year Treasury yield trajectory and its impact on asset prices.