By Ann Saphir

(Reuters] – Federal Reserve policymakers indicated Wednesday they expected faster interest rate increases this year than anticipated just a few month ago. This will bring them up to around 1.9% by year’s end as they attempt to curb inflation.

The markets quickly priced their agreements, then more, with contracts being traded at the Fed’s target rate pricing of 1.93% before 2022.

In 2004-2006, the Fed did not raise rates as fast as they now anticipate.

They raised rates at each meeting by 25%. Since then, however, the pace of tightening has slowed due to weaker recovery and lower inflation.

Fed Chair Jerome Powell stated Wednesday that with inflation at three-times the Fed’s 2% target, Fed inflation gauges are now indicating that policymakers “acutely” recognize the need for price stability and have committed to do so.

The exact pace of rate increases is still unknown, as markets are pricing in the possibility of a half point increase in June or May.

Powell made it clear that Powell was open to this possibility by repeatedly stating that, if inflation does not slow down as anticipated, then the Fed will accelerate rate increases.

In fact, the Fed’s 16 policymakers had mapped out rate hike paths for this year that required at least a one-half point increase.

Richard Moody, Regions Chief Economist wrote that “Clearly the Fed’s policysetting committee wanted to send an aggressive message of their resolve to reininflate inflation and keep inflation expectations under control.”

Markets got it.