Fed poised to hike rates by 0.75 percentage points for fourth time

The Federal Reserve is poised to raise interest rates by another 0.75%, the latest sign of how aggressively officials are fighting to slow the economy, even as the risks of a recession next year rise.

Fed officials show no signs of backing down, and they’ve made clear that getting consumer prices down from the highest inflation rates in 40 years will require pain for households and businesses.

But what isn’t clear is when or how central bankers will decide to ease up — and if they will only scale back once it is already too late to head off a downturn.

The central bank is expected to raise rates again at upcoming meetings before possibly hitting pause. What’s really going to matter from this meeting is what is signalled about the next 4 months.

The Fed has already hiked rates five times this year, the last 3 at 0.75 percentage points, which used to be considered unusually steep. The bank is moving at a level of intensity not seen in decades.

Federal Reserve Chair Jerome H. Powell will hold a news conference where he will face questions on the outlook for inflation, the labor market, risks of a recession and future rate hikes. 

Fed’s own projections show a possible hike of .5% followed by a smaller hike in early 2023. He will be pressed on how policymakers will arrive at those decisions, especially since inflation is high.