This is the Fed's quarterly economic projections.
They revised down their growth projections for the economy to just 0.2% for the year. Just three months ago, they were looking for the economy to grow 1.7% this year. That's a big downgrade.
They also revised up unemployment projections, and inflation.
And with that, they revised UP the projection for interest rates.
And it wasn't a small upward revision. After today's hike, the Fed is now at 3.00%-3.25% range on the Fed Funds rate. And the projections have them getting to 4.4% by year end.
That's another roughly 125 basis points of tightening.
If they were to follow through on this outlook, they would bury the economy into a deep recession.
We've already had two consecutive quarters of negative growth in the first half of the year. And the Atlanta Fed's GDP model is barely showing growth for the third quarter (at just 0.3%).
With the deterioration in the economic data it's a safe bet that Q3 will turn negative too. If the Fed goes another 125 basis points before year end, we would probably have four consecutive quarters of economic contraction.
Stocks reacted to this scenario late in the afternoon.
If the slide in stocks continues tomorrow, and into Friday, we may get a response from Powell himself. He's conveniently scheduled to speak on Friday afternoon in a virtual conference called "Fed Listens," where the Fed engages a wide range of business leaders from a variety of industries.
Remember, while the Fed cares about inflation, they care more about inflation expectations. And Powell said today that inflation expectations remain anchored (under control). What the Fed cares most about, is maintaining stability. If stocks test the June lows (not too far away), stability becomes questionable.
They don't want to see market meltdowns. Market meltdowns can quickly become financial system meltdowns and economic meltdowns.
I suspect the Fed will be "listening" to markets closely over the next day and a half. If today's message isn't resonating well, Powell will likely soften the tone (walk things back) on Friday.