The central bank’s aggressive move to contain inflation came after the US consumer price index rose 8.6% a year in May, its biggest year-on-year increase since 1981.

Members of the Federal Open Market Committee reiterated the Fed’s commitment to stabilizing inflation and indicated that a stronger path of rate hikes lies ahead. Officials also cut their outlook for economic growth for 2022 to just 1.7% from 2.8%.

The move sent risk assets bouncing back, but analysts were divided on the implications for the market and the depth of the likely recession ahead.

“Recognizing that more hikes now mean less later, the Fed has demonstrated its resolve to tame inflation without undermining its jobs mandate,” said Ronald Temple, co-head of multi-assets and head of US equities. at Lazard Asset Management.

“While some onlookers argued for an even steeper hike, the Fed understood that the combination of rate hikes and QT is already taking the US into uncharted territory with significant risks to growth. Today’s hike sent exactly the right message to the markets.”

Data released Thursday will include housing starts and building permits from May, as well as unemployment insurance claims figures from last week.

Auctions will be held for $35 billion in four-week Treasury bills and $30 billion in eight-week Treasury bills.