The Federal Reserve typically delivers what is discounted, which makes a 75bp hike likely today. But then what? And what of the 50bp that was promised at the last FOMC? In fact a 50bp hike would inject some sense into the equation. Moreover, the rise in market rates has come from higher real rates, which tighten conditions, requiring less from the Fed

Delivery of a 75bp hike should happen as that is what is discounted. But 50bp was what was promised...
It is quite unusual for the Fed Chair to stand up after an FOMC meeting and explicitly signal a 50bp hike at the next one, only to then deliver something different. But that is precisely where we are as we face into today’s meeting. A 75bp hike is fully discounted, and because it is fully discounted, that is what is likely to be delivered. This is not the market forcing the hand of the Fed. The build of the market discount has, it seems, been steered by the Fed itself, as well placed soundings were placed with the press, in effect pre-warning the marketplace that a 75bp hike was in the pipes.

Arguably the bigger story here is not the 75bp hike, but rather the way in which it has elbowed out the 50bp hike

Arguably the bigger story here is not the 75bp hike, but rather the way in which it has elbowed out the 50bp hike that had been boldly pre-announced. If the Fed were to go ahead and deliver on that promise of a 50bp hike it would cause quite a stir, as it would deviate significantly from the market discount for a 75bp hike, and in a way that is contrary to the direction that the Fed needs to go here. If the Fed were to deviate from the market discount, logically it should then be going for a 100bp hike. All things considered, we think the Fed will deliver on the discount for 75bp.

It makes forward guidance come across as no more than a hunch

https://www.fxmag.com/forex/rates-spark-what-will-markets-make-of-t...