The Federal Reserve hiked for the first time since 2018 and signaled that it intends to hike six more times this year. Notably, there was one dissent with St. Louis Fed President James Bullard in favor of a 50 point hike.

Going into the FOMC decision, the S&P 500 (SPY  ) was up by more than 1.5% on some positive news that Ukraine and Russia were getting closer to a ceasefire and that Chinese authorities signaled support for the country's beleaguered tech industry.

Following the decision, stocks slid by more than 2%, but these losses were quickly reversed, and the S&P 500 ended up closing more than 2% higher. Even bonds were little changed despite a pretty hawkish statement by the Fed which signaled more rate hikes, a higher inflation forecast, and slower growth. The most likely explanation is that the market had already priced this in, and traders were leaning bearish.

Traders were most interested in its future projection for rate hikes. At the moment, it expects 6 more this year and 3 before 2023, when it sees the rate hike cycle ending and inflation moderating to more normal levels.

Another area of interest is the Fed balance sheet which currently sits at $9 trillion. It's speculated that this could be unwound to combat inflation without necessarily affecting the economy. Although, it would likely dampen risk appetites in financial markets.

At his press conference, Fed Chair Powell faced some tough questions about inflation and the Fed previously labeling it as 'transitory'. He did make some headlines when he said that recessions risks aren't particularly elevated at the moment, describing the economy as strong enough to handle higher rates.

There was a major change in terms of Committee members' forecasts for inflation and growth. At the December meeting, GDP for 2022 was expected to be 4%. Now, it's 2.8%. Inflation went from 3.1% to 4%.

There's two camps, and the Fed seems to be straddling both. One believes that inflation is going to fall on its own accord, while the economy is decelerating following more than a year and a half of acceleration. Thus, they see the Fed making a 'policy error' by hiking into a slowing economy which could tip the economy into a recession.

On the other side, there is the camp that believes the "Fed is behind the curve". They believe that inflation is out of control and the Fed must use all its tools to bring it down to a more normal level even if it leads to a recession.