STORY: The Federal Reserve on Wednesday raised interest rates again - by another giant, three-quarters of a percentage point - as it aggressively battles the worst inflation in 40 years.
At a press conference after the meeting of policy makers, Fed Chair Jerome Powell signaled that even more rate increases were on the way, but that future moves could possibly be made in smaller steps.
But for investors who were hoping to hear that the fed might soon consider pausing its tightening campaign; Powell said that was ‘premature.’
“It's very premature, in my view, to think about or be talking about pausing our rate hike. We have a ways to go or policy. We need ongoing rate hikes to get to to that level of of sufficiently restrictive. And we don't of course, we don't really know exactly where that is.”
The fed is trying to slow the economy enough to cool off rising prices without triggering a recession.
But Powell said a period of slower growth seems all but inevitable.
“Our overarching focus is using our tools to bring inflation back down to our 2% goal and to keep longer term inflation expectations well anchored. Reducing inflation is likely likely to require a sustained period of below trend growth and some softening of labor market conditions.”
Powell said the change in pace of rate increases could come as soon as the central bank's next meeting in December, but he also cautioned that there remains extensive uncertainty about how high rates will need to go.
The fed's target rate - in a range between 3.75% and 4.00% - is now at the highest since early 2008.
The fed has raised rates at its last six meetings beginning in March, marking the fastest round of increases since former Fed Chair Paul Volcker's fight to control inflation in the 1970s and 80s.