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At first investors and traders thought they heard the Federal Reserve signal that the central bank was thinking about a pivot to a policy of cutting interest rates.

And stocks rallied.

But then Fed chair Jerome Powell “clarified” the Fed’s thinking in his post-meeting press conference. It would be “premature,” Powell said, to think about pausing the Fed’s policy of increasing interest rates to fight inflation. The Fed, he added still had a “ways to go” and the “Ultimate level of interest rate will be higher than previously expected.” Powell stressed that the Fed’s goal continues to be a reduction in inflation and that the Fed is surprised at how sticky prices are and that inflation hasn’t given up more ground to the Fed’s six interest rate increases in 2022.

So, yes, as everyone did expect, the Federal Reserve raised its short-term, benchmark interest rate by 75 basis points at today’s meeting of the Open Market Committee

And, no, as many hoped, the Fed didn’t signal a slowdown in interest rate increases or an earlier-than-expected pause in those increases, or an early shift to interest rate cuts. Powell did say that it would be appropriate to raise interest rates by a smaller amount, say 50 basis points instead of today’s 75, at the next meeting or two. The last Fed Dot Plot projection in September showed the Fed raising rates by 50 basis points at its December 14 meeting. (The next Dot Plot revisions to projections on interest rates, inflation, and economic growth are scheduled for that December 14 meeting.) The market seems almost every divided on 50 basis points versus 75 at the December 14 meeting. The CME Fed Watch Tool today, put the odds of a 50 basis point increase at 52% and of a 75 basis point increase at 48%.

The market was disappointed.

The Standard & Poor’s 500 fell 2.50%. The Dow Jones Industrial Average dropped 1.55%. The NASDAQ Composite declined 3.36% and the NASDAQ 100 lost 3.39%. The small-cap Russell 2000, which had been a pillar of relative strength in the last few sessions, gave up 3.08%.

The yield on the 10-year Treasury rose 4 basis points to 4.08%. The yield on the 2-year Tr4easury, which tends to be very sensitive to Fed moves, moved up to 4.59% from 4.52% yesterday.