Fed Hikes a Quarter

The Federal Reserve has just issued its June policy decision to raise the Federal Funds rate by a quarter point to 5.25%.  This is the 17th consecutive quarter point hike, in a monetary tightening campaign that began two years ago tomorrow.

The policy statement that accompanied the decision maintained its data-driven focus.

The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

The statement suggests that the effects of high energy prices on core inflation have started to occur, as the committee believe they would as of their previous meeting, but that "ongoing productivity gains have held down the rise in unit labor costs, and inflation expectations remain contained."

As far as I can tell, the most dovish change in the inflation language is the replacement of this (from the prior month's statement):

The Committee judges that some further policy firming may yet be needed to address inflation risks...

with this (from today's statement):

Although the moderation in the growth of aggregate demand should help to limit inflation pressures over time, the Committee judges that some inflation risks remain.

It seems they're keeping some powder dry for an additional hike(s), but noting that the deceleration from the first quarter's blistering growth may encourage them to sheathe their hiking fingers.