try as the federal reserve did wednesday to send the message that multiple interest rate hikes are ahead the market wasnt buying it as investors had time to digest the federal open market committees postmeeting message  they appeared to come to two conclusions there is at most only one increase on the horizon and the state of monetary policy going forward should be good for the market perhaps its just that they dont believe that this fed has the resolve to restore price stability if the economy slows materially said quincy krosby chief global strategist at lpl financial at some point the fed is going to have to make up its mind are they going to push this or just drop it right now the market certainly doesnt think theyre going to come with a second rate hike nor they actually believe that the fed is going to be higher for longer especially as chairman jerome powell seems to equivocate indeed market pricing reflected a high level of skepticism that the fed is going to do much more in terms of policy tightening the probability for a july rate hike was around 67 thursday afternoon just slightly higher than it had been heading into the fomc meeting according to the cme groups fedwatch gauge of futures market pricing however traders assigned a very low probability to hikes at future meetings this year 94 in september 87 in november and just 51 in december that came even though 12 of the 18 fomc members said they envision rate hikes totaling 50 basis points or 05 percentage point by the end of 2023 markets like what they see amid that doubt about future hikes came a strong rally in the equity market  with the s  p 500 up about 074 around 1 pm et and the dow jones industrial average gaining more than 350 points fed funds futures arent buying to wednesdays fomc sep guidance of 2 more rate hikes this year wrote nicholas colas cofounder of datatrek research they did however finally acquiesce to the idea that the fed will not be cutting rates in 2023 in our view that is good news in that it is consistent with what we hear from institutional investors we no longer have to worry about market expectations that are out of sync with common sense the market moves which also features plunging treasury yields reflected a dichotomy between the fomc statement and dot plot of individual members expectations against powells rhetoric powells news conference after the decision to skip a rate hike at this weeks meeting went in multiple directions at one point he expressed optimism that inflation was coming down then soon after said it wasnt declining fast enough powell voiced support for the decision not to raise rates by saying the fed is in a good position to step back and watch data and the impacts of the previous hikes while also stressing that more hikes are likely needed and saying twice that the july session would be a live meeting without being asked the chairman said the fed isnt considering an everyothermeeting approach to raising rates but it was his observations on inflation that seemed to give the market the most hope and diminished expectations of a hawkish central bank i would almost say that the conditions that we need to see in place to get inflation down are coming into place powell said that would be growth meaningfully below trend that would be a labor market thats loosening it will be goods pipelines getting healthier  i think that theyre the things that are in place that we need to see but the process of that actually working on inflation is going to take some time data cooperates thursday brought an abundance of economic data that seemed to run in the feds direction weekly jobless claims held steady around the highest level since october 2021 retail sales  which are not adjusted for inflation rose 03 which was more than expected but import prices tumbled 06 for may and were down 59 year over year the biggest 12month drop since the period ending may 2020 the empire state manufacturing survey unexpectedly turned positive even as both the prices paid and prices received indexes fell sharply across wall street there was skepticism the fed would want to and perhaps more importantly need to raise rates as much as the dot plot indicated goldman sachs for instance said it was maintaining its forecast of one more hike then a pause the firm left open the possibility of another move in september or november though neither is in our baseline forecast economist david mericle wrote that sentiment was a popular one on wall street the fed may need to turn hawkish but thats not the most likely case our baseline remains for a final 25bp rate hike in july with the fed then remaining on hold into early 2024 in response to further evidence of labor market weakening and inflation falling somewhat faster than envisioned in the feds latest forecasts matthew luzzetti chief economist at deutsche bank said in a client note markets will next hear from powell in a week when he testifies before the senate banking committee on june 22 multiple other fed speakers are on tap in coming days with governor christopher waller and st louis regional president james bullard addressing the public friday