US Federal Reserve raises benchmark interest rate 75 basis points, hints at slowdown

The U.S. Federal Reserve hiked its benchmark interest rate by three-quarters of a point for a fourth straight time, but hinted that it could soon reduce the size of its rate hikes.

In his remarks on Wednesday, Federal Reserve Chairman Jerome Powell said there is “significant uncertainty” around the level of rates needed to bring down inflation but “we still have some ways to go.”

The Fed’s move raised its key short-term rate to a range of 3.75 per cent to 4.0 per cent, its highest level in 15 years. It was the bank’s sixth rate hike this year – a streak that has made mortgages and other consumer business loans increasingly expensive and heightened the risk of a recession.

In a statement, the Fed suggested it could soon shift to a more deliberate pace of rate increases and said in the coming months, it would consider the cumulative impact of its large rate hikes on the economy.