The market response to yesterday’s highly expected FOMC rate hike of 25bps and move up in the dot plots was somewhat confusing. The probability of three rate hikes in 2018 stayed unchanged at 39.3% while expectations for four rate hikes increased to 33.5% (from 28%), implying a slightly “hawkish” outcome. Still, the Fed's language downgraded the economic outlook...as the Fed statement said “economic activity has been rising at a moderate rate", essentially replacing "solid rate" with "moderate rate". They also shifted from "Gains in employment, household spending, and business fixed investment have been solid," to "Recent data suggest that growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter readings." 

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