Mark your calendars. The next Federal Open Market Committee (FOMC) meeting is in 40 days. To be precise, it will be held December 13-14.

There will be a lot of squawking ahead of that meeting about what the Fed should -- or should not -- do with the policy rate at that meeting. Heck, there was a lot of squawking about that proposition before the November 1-2 FOMC meeting that just concluded.

The hope was that the Fed would signal an inclination to take a less aggressive rate-hike approach after the November meeting. It did signal an open-minded view in that respect, noting in its policy directive that:

"In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy (emphasis our own), the lags with which monetary policy affects economic activity and inflation, and economic and financial developments."

That's all well and good, but Fed Chair Powell went out of his way in the press conference to make it clear that such a move should not be considered a "pivot" in the Fed's policy approach.

The Fed chair emphasized that it is very premature to think about pausing the rate hikes and that the Fed has a way to go to get the policy rate to a restrictive level that is sufficient for getting inflation back down to the 2.0% target.

It is his belief, too, that incoming data since the meeting in September suggests the ultimate level of interest rates will be higher than previously expected.

The last set of projections published after the September meeting placed the terminal rate at 4.6% in 2023. Mr. Powell implied the next set of projections in December will likely show an upward revision to that median projection.

The fed funds futures market appeared to be listening. According to the CME's FedWatch Tool, the probability of a terminal rate in the 5.00-5.25% range by June 2023 has increased to 81.0% versus 19.3% only a week ago.

That's the best guess at this point anyway. It is an educated guess, but it is a guess nonetheless considering the Fed chair himself said he does not know what the end point will be.

The data will drive that decision, and from his perspective, there has yet to be any meaningful progress in tamping down inflation or in softening the labor market.

So, the Fed will continue raising rates. When it gets to the eventual end point, there aren't any promises being made that it will only be for a short time. On the contrary, the prevailing implication is that the terminal rate will be higher and held there longer than previously expected.

Circumstances could change to alter that thinking, but the only pivot seen and heard coming out of the November FOMC meeting was the one engineered by Fed Chair Powell.

The market had been hoping that the Fed could be relatively close to being done raising rates and inclined to start cutting rates soon thereafter. That is not at all what the Fed Chair is thinking, and that point was clear at his press conference.

His concern now isn't so much about the scope of the next rate increase as it is about how high to raise rates and how long to keep monetary policy restrictive.

The adage in the market is that you don't fight the Fed. Well, Fed Chair Powell just delivered a counterpunch that sent the pivot argument to the mat.

--Patrick J. O'Hare, Briefing.com