Fed's Powell on rate hikes: 'We're trying not to make a mistake'

STORY: Another "unusually large" increase in interest rates may be appropriate at the Federal Reserve's September meeting, but the decision will be determined by the incoming economic data between now and then, Fed Chair Jerome Powell said on Wednesday.

Coming on top of a 75-basis-point hike last month and smaller moves in May and March, the Fed has raised its policy rate by a total of 225 basis points this year as it battles a 1980s-level breakout of inflation with 1980s-style monetary policy.

The policy rate is now at the level most Fed officials feel has a neutral economic impact, in effect marking the end of pandemic-era efforts to encourage household and business spending with cheap money. The rate also matches the high point of the central bank's previous tightening cycle from late 2015 to late 2018, a level reached this time in the span of just four months.

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