The Federal Reserve increased the federal funds rate by 25 basis points, marking its highest level since 2007. Additionally, the Fed plans to continue reducing securities on its balance sheet, indicating ongoing monetary tightening. The Fed has revised its projections for GDP growth, unemployment, and inflation in 2023, with weaker GDP growth, lower unemployment, and higher inflation expected. The federal funds rate is expected to reach its peak at 5.1%, indicating the potential for one more rate hike this year. Despite stubbornly high inflation, the consensus is that the rate-hiking cycle is coming to an end, with the Fed likely to begin cutting rates by the end of the year. Tighter lending conditions and a weakening economy will likely keep capital markets activity subdued, but greater certainty on the interest rate outlook could lead to a recovery in the latter half of 2023.