I'm currently taking a graduate-level finance class and it is essentially all about the Federal Reserve System. You can imagine we've talked A LOT about the current moves of the Fed. I can say 99% of the class and both profs "predicted" this move a month ago.
The Fed has two mandates - price stability and maximum sustainable employment. Those two mandates are in many ways opposite goals with the term "sustainable" being important. When everyone is employed that puts upward pressure on pricing because people have money. When prices/rates are high that puts downward pressure on employment. The goal of 2% inflation and 5% unemployment has been a sweet spot for balancing these mandates. The Fed moved the federal funds rate to zero during CV-19 based on lessons learned during The Great Depression when rates were high enough entering the initial economic downturn that credit markets could not provide adequate liquidity to keep people/businesses going and so there was a run on the banks. Makes sense, going into CV-19 if you lost your job or had to stay home low rates gave people options for loans, revolving credit, home refi, etc to keep the lights on and families fed. The question now is did rates stay too low for too long? Probably but hindsight is 20/20. If the Fed didn't keep rates low enough for long enough liquidity problems stifle the economy. If you keep them low for too long inflation becomes a problem and eventually, that too stifles the economy. The Fed got it wrong when they thought inflation was "transitory" but again hindsight is 20/20.
So right now we have mixed signals - employment is at record levels, the housing market is still going strong in most places, the market is down from the CV-19 bubble but not too far off from where it would've been based on pre-CV-19 slopes, my business just had its best month ever in January 2023 after having it's worst month ever in Jan 2022, inflation is still high but it is showing signs of easing. Theoretically, the rate hikes have not yet hurt the economy enough but it's a balance - the goal is to hurt it just enough to get price stability under control while maintaining employment but not so much that the hikes themself cause a recession. I think the Fed made a solid decision yesterday - certainly, we are not out of the woods yet and there are economic indicators suggesting things are easing but the rate hikes have had a minimal effect so far and unemployment is still too low at 3.5%.