Luzzetti sees the FOMC outcome as towards the hawkish end of expectations, driven by half the dots showing rate hikes and a significant upward revision in core inflation forecasts to 3.3% this year and 2.5% next year. He believes the Fed is accommodative given easy financial conditions and solid growth. He expects Warsh to use the press conference to frame the hawkish dot plot, and if he doesn't, other committee members will speak.

Clarida is not surprised Warsh didn't submit a dot, but is surprised by the hawkish tilt with nine participants projecting a rate hike. He attributes this to a broad-based markup in core inflation projections, not just energy pass-through. He notes the removal of the employment mandate language is an important change, but doesn't think they're abandoning it. He wants to hear Warsh flesh out the dual mandate and balance sheet plans.

Swonk is not surprised by the hawkish tilt, having seen it in the minutes from the last meeting. She notes Fed governors are now emphasizing price stability over employment. She expects two rate hikes by year-end due to sticky core services inflation, not just energy or tariff shocks. She highlights that high-end consumer spending is buoying service sector inflation, creating a challenge for the Fed managing aggregates.

Bob interprets the FOMC statement and dot plot as a clear hawkish surprise. Half the committee expects rate hikes this year, which is a 'shot across the bow' to markets. He sees the Fed chair's dismissal of the dot plot as a 'slap across the face' and believes the Fed is preparing markets for rate hikes, not cuts.