The Federal Reserve’s rate-setting committee raised benchmark rates by 75 basis points and hinted at a more gradual tightening pace in the months ahead. At the conclusion of its two-day meeting, the Federal Open Market Committee unanimously voted to raise the target range for the federal funds rate to 3.75-to-4 percent, with no dissents in favour of a smaller move.

In a largely-unchanged official statement setting out the decision, policymakers set the stage for a more nuanced approach to setting rates, saying “In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments”.

Markets rallied in the moments after the release as traders lowered odds on a three-quarter-point move at the December meeting. US equities climbed, two- and ten-year government bond yields weakened, and the dollar slid.

Market focus is now shifting to the press conference, where Jolly Old St. Powell’s comments could put coal or chocolate in investor stockings.