Equities went on a wild ride on Wednesday first moving higher, then lower, and then higher again as the FOMC initiates the first interest rate hike in four years. The FOMC raised the benchmark rate by 25 basis points despite calls for a much larger hike. The news that spooked the market is the outlook for rate hikes and inflation, an outlook that now includes as many as seven more interest rate hikes this year and for inflation to remain hot well into 2023. What this means for consumers is higher prices, what it means for businesses is tighter margins and slowly eroding business as prices creep higher.

The risk for the market now is twofold. On the one hand the FOMC is still behind the curve in regards to inflation. This mean's inflation will remain a risk for S&P 500 earnings and will likely cut into the earnings growth outlook for the year. On the other hand, a mere 25 basis points will do nothing to slow inflation and will only spur it to new heights in the near term. IF the FOMC were to actually tackle inflation in a meaningful way they'd be forced to spur a recession in the economy.