Fed goes big with latest rate hike

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STORY: The U.S. Federal Reserve delivered its third straight interest rate increase of three-quarters of a percentage point on Wednesday and signaled a high likelihood of at least one more move of that size this year.

Fed Chair Jerome Powell said U.S. central bank officials are "strongly resolved" to bring down inflation from the highest levels in four decades.

"We're committed to getting inflation back down to 2%, because we think that a failure to restore price stability would mean far greater pain later on."

The Fed raised its target interest rate to a range of 3.00%-3.25% - the highest level since 2008 - and new projections showed the policy rate rising to between 4.25%-4.50% by the end of this year before topping out at 4.50%-4.75% in 2023.

The Fed's projections, meanwhile, showed the economy slowing to a crawl in 2022, with year-end growth of 0.2%, rising to 1.2% in 2023, well below the economy's potential.

POWELL: "We have to get supply and demand back into alignment. And the way we do that is by slowing the economy. “

Kevin Mahn, President and Chief Investment Officer at Hennion & Walsh Asset Management, said Wednesday he was surprised that the Federal Reserve announced that it would continue raising rates so aggressively.

"And my biggest concern at this point in time is that the Fed remains too hawkish in the face of an economy that continues to slow. // We know that the economy has now met the technical definition of recession, and the yield curve also remains inverted. The yield curve has remained inverted prior to every recession in our country going back to 1955. So if in fact the Fed remains as hawkish as their dot plot chart is suggesting, I believe that could push the economy into a deeper and more protracted recession than would have otherwise occurred on its own."

The federal funds rate projected for the end of this year signals another 1.25 percentage points in rate hikes to come in the Fed's two remaining policy meetings in 2022, a level that implies another 75-basis-point increase in the offing.

Rate cuts are not foreseen until 2024.