The Federal Reserve on Wednesday held off on a final decision to start tapering asset purchases, but policymakers are evenly split over whether the cycle’s first rate hike should come next year, not in 2023. The Dow Jones, up strongly before Wednesday’s 2 p.m. policy news, rallied further despite the mixed hawkish-dovish Fed meeting outcome.

The Dow and broader stock market may stay volatile as investors react to Fed chief Jerome Powell’s press conference. Powell is seen as one of the Fed’s most dovish members, behind the shift to not just tolerating but welcoming inflation above the 2% target.

The dot-plot, tracking each Fed policy committee member’s individual outlook, had 9 of 18 penciling in one quarter-point rate hike in 2022. That was up from 7 of 18 favoring a 2022 tightening in June projections. However, 3 of the 9 favoring a 2022 rate hike actually think two rate hikes will be warranted next year. That lifted the median projection to 0.3% from the current rate, which targets the midpoint of 0%-0.25%.

One caveat: While Powell and other Fed governors vote at every meeting, regional bank presidents get to vote on a rotating basis…read more.