MARKET TALK: FED SET TO HIKE BY 25 BPS

The Fed is set to announce in short order the outcome of its policy meeting. All major banks predict a hike in the overnight fed funds target rate to 5.25% from 5%. There's not a lot of clarity in terms of expecations about how the Fed explains its move - some believe it could well release a policy statement close to the one that came out after the May 10 gathering. Still, markets will be looking for clues about whether more tightening is to come. The consensus view believes the Fed will hike a final time to 5.50% at the September meeting, although a notable minority believe it will happen instead at the August meeting.