It's the end of the tightening cycle as we know it

Wednesday's Federal Reserve press conference showed signs we've entered a new phase in the Fed's efforts to bring inflation under control.

Why it matters: For the last year, the Fed was playing catch-up, trying to use its words and actions to regain lost credibility as an inflation-fighter. Now, it is in a better position to wait and see how things evolve.

Flashback: This time a year ago, inflation was soaring and it was clear that the Fed had misjudged how high and long-lasting inflation would be.

• As a result, the central bank not only started raising interest rates aggressively, but Powell also offered fairly explicit guidance about what would happen in future meetings.
• The idea was to tighten financial conditions and try to prevent inflationary psychology from setting in — essentially using both words and actions to keep inflation from spiraling out of control.
• "[I]n the current highly unusual circumstances with inflation well above our goal, we think it's helpful to provide even more clarity than usual" about future policy, Powell said at his news conference one year ago.

State of play: But it's not 2022 anymore, inflation isn't 9% anymore, and it's not at all obvious whether the Fed is still playing catch-up in its rates policy or if rates are high enough already to bring the economy in for a landing.

• That helps explain why Powell took great pains not to send signals Wednesday about the near future.
• "I want to stress one more thing, and that is that the committee decision made today was only about this meeting," he said. "We didn't make any decision about going forward, including what would happen at the next meeting."

This ambiguity is also evident in the dot plot — the visual in which each policymaker's expectation for where rates are heading is published.

• Two officials saw no further rate hikes this year being justified, while at the other extreme one saw another full percentage point worth of hikes. (The consensus view was that another half-percentage point worth of hikes will be justified.)

Between the lines: Despite these widely varied opinions, there were no dissents from Wednesday's policy decision, suggesting that the decision was a carefully calibrated compromise in which everyone got something they wanted.

• Monetary doves got a breather from rate hikes, while hawks got communications suggesting two more hikes are on the way.
• That comes through in Powell's comments as well, which preserve the option of more rate hikes without committing to them.

The bottom line: The Fed's actions over the last year have helped it regain credibility that it will do what it takes to fight inflation, even if that causes economic and market pain. That gives it more flexibility in the months ahead to adapt course.