Fed unleashes another big rate hike but hints at a pullback

The Federal Reserve pumped up its benchmark interest rate Wednesday by three-quarters of a point for a fourth straight time to fight high inflation but hinted that it could soon reduce the size of its rate hikes.

The Fed’s move raised its key short-term rate to a range of 3.75% to 4%, its highest level in 15 years. It was the central bank’s sixth rate hike this year — a streak that has made mortgages and other consumer and business loans increasingly expensive and heightened the risk of a recession.

But in a statement after its latest policy meeting, the Fed suggested that it might soon shift to a more deliberate pace of rate increases. It said that in coming months it would consider the cumulative impact of its large rate hikes on the economy. It noted that its rate hikes take time to fully affect growth and inflation.

Those words indicated that the Fed’s policymakers may think borrowing costs are getting high enough to possibly slow the economy and reduce inflation. If so, that would suggest that they may not need to raise rates as quickly as they have been doing.