Expansion of the U.S. economy for the fourth quarter of last year and moderating inflationary pressures led the Fed to choose a less aggressive stance. Hence, the central bank hiked rates by 0.25 percentage points. This revived investor optimism.
However, Fed Chair Jerome Powell has been clear about policymakers’ North Star: Getting inflation down to their 2% target. Signaling further rate hikes, he expressed cautious optimism, “We’re going to be cautious about declaring victory and sending signals that we think the game is won, because we've got a long way to go.”
