The Fed spoke and Wall Street listened. Wednesday’s rate hike of 0.75 percentage points, or 75 basis points, came with a dose of hawkish central bank rhetoric that prompted economists to ramp up their views on where interest rates are headed, and what the cost of such policy might be greater. picture. “We think this really underscores the potential for a recession over the next 12 months,” said Rob Dent, Nomura’s chief US economist for the Americas, following a meeting that saw the Federal Reserve dramatically raise its unofficial forecast for the trajectory. of future rates. “The Fed chair’s comments yesterday only support that view. Growth will slow and the Fed will stand there and say inflation is too high, so we will continue to tighten policy,” Fed Chairman Jerome Powell said. Dent said the outcome of the meeting was largely in line with his company’s expectations, or that the central bank was likely to raise the benchmark interest rate to a final range of 4.5%-4.75% by 2023. However, other companies were somewhat surprised. Markets fell sharply on Wednesday and continued to drift lower on Thursday. “There will be a point that we think will happen over the next couple of months when growth really starts to weaken,” Dent said. “The market is looking for the Fed to pull back. The risk is that they won’t, and then you’ll see more of a sudden tightening in financial conditions.” Here’s a look at views elsewhere off the street: JPMorgan Chase CALL: The company still expects the Fed to raise 50 basis points in November, but raised its December view to another 50 basis points, raising its final forecast by 25 basis points to 4.5%. Commentary: In a note titled Bringing Pain, JPM Chief US Economist Michael Feruli cited these effects: “The new outlook is not only tighter but somewhat more realistic, as it recognizes at least now that some weakness in the labor market is needed. To lower inflation, however, it is still close to pure inflation, as only a whiff of labor market weakness generates a very large drop in inflation.” Goldman Sachs call: Move 75 basis points in November, 50 basis points in December and 25 basis points in February, to reach a peak of 4.5%-4.75%, half a percentage point higher than the previous forecast. Comment: “The trajectory of the money rate in 2023 will depend primarily on two issues. The first is how fast growth and employment and how slow inflation … and the second is whether participants in the FOMC will really be satisfied with a sufficiently high level of money,” the economists wrote Jan Hatzius and David Merkel: “Interest rate and ready to slow or stop tightening while inflation remains uncomfortably high.” Bank of America Call: 75 basis points in November, 50 in December, 25 points in both February and March and a final interest rate of 4.75%-5%, or 75 basis points higher than previous forecasts Comment: “Our core outlook for the US economy continues to call for a contraction in the economy starting in the first half of 2023, including an increase in the rate Unemployment to 5.0%,” Bank of America economist Michael Gaben wrote. “The Fed believes the real policy mistake is not to restore price stability and is willing to risk a recession in order to bring inflation back to 2.0%.” Citigroup Call : November to see 75 points a SAS, followed by 50 in December and 25 in February adding a cumulative 25 basis points to a final price of 4.5%-4.75%. Commentary: “We had been expecting the Fed to send an upbeat message through the higher ‘dots’ and we underlined the upside risks to Fed rates,” Citi economist Andrew Hollenhurst wrote. “However, the Fed was able to beat even our hawkish expectations.” Morgan Stanley CALL: Moved 75 basis points in November, up 25 points from previous expectations, and a general call that the central bank will stay higher for longer than the market expects Comment: “Although the fourth rally in November is not guaranteed, the President Powell’s tone today and our data expectations make this our base case,” writes Chief US Economist Elaine Zentner. “The real economy’s response to higher rates has so far been muted, prompting the Fed to raise the peak rate and a longer walking cycle. We believe continued inflation will keep the Fed at its peak for most of next year, challenging the market to assume an early start to cuts.” Deutsche Bank call: 75 point move in November, followed by another 50 point in December. Recession in the aftermath. Comment: Chief Economist wrote Americans Matthew Luzzetti: “This near-term signal is reinforced by indications from President Powell’s press conference and is in line with our current view.” “More broadly, the committee’s optimistic signals were consistent with our expectations of a final interest rate of close to 5% by early 2023 leading to an stagnation by mid-year.” Barclays Call: 75 in November, followed by 25 in December, raising the year-end funds rate to 4.25%-4.5%. Both calls were 25 basis points higher than the previous. Another 25 basis point increase in February , followed by a 50 basis point cut “in the latter part of the year.” Comment: “The image that emerged from the meeting is that of a committee committed to marching aggressively amid persistent inflationary pressures from an economy driven by a very robust and resilient labor market,” wrote UBS economist Jonathan Millar. The Call: 75 basis points in November, and another 50 in December, with three cuts of 25 basis points later in 2023. “We expect the downside risks to be elevated,” wrote economist Jonathan Bingle. “We’re looking at this as quite a restrictive policy. Next year, we expect inflation to make progress toward 2.0% more than the FOMC appears to be, and we expect the labor market to slow significantly.” CNBC’s Michael Bloom contributed to this report.