Fed rate hikes seen in 2023, tapering could come “fairly soon”

Markets were mixed on Wednesday.

The S&P 500 fell 0.5 percent and the Shanghai Composite fell 1.1 percent but the STOXX Europe 600 rose 0.2 percent to a record high.

US stocks fell after the Federal Reserve announced after its monetary policy meeting that it had raised its inflation expectations and moved up the time frame on when it will next hike interest rates to as soon as 2023.

“This is not what the market expected,” said James McCann, Aberdeen Standard Investments’ deputy chief economist.

“If you’re going to get two rate hikes in 2023, you have to start tapering fairly soon to reach that goal,” said Kathy Jones, head of fixed income at Charles Schwab.