Powell: Rate hikes may slow, but inflation fight hardly over

WASHINGTON (AP) — Federal Reserve Chair Jerome Powell sought Wednesday to strike a delicate balance at a moment when high inflation is bedeviling the nation’s economy and commanding a central role in the midterm elections.

Powell suggested that the Fed may decide in coming months to slow its aggressive interest rate increases. Yet he also made clear that the Fed isn't even close to declaring victory in its fight to curb an inflation rate that is near four-decade highs and has shown few signs of ebbing.

When the Fed ended its latest policy meeting Wednesday, it announced that it was pumping up its benchmark rate by a substantial three-quarters of a point for a fourth straight time. Its key rate now stands in a range of 3.75% to 4%, the highest 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.

The statement the Fed issued suggested that it would begin to take a more deliberate approach to rate hikes, likely leading to smaller increases in borrowing costs. In doing so, it would consider that rate hikes take time to feed into the economy and achieve their goal of slowing inflation.

The financial markets initially cheered the notion that the Fed might soon decide to slow its hikes, with stock and bond prices surging higher.

Yet as his news conference got under way, Powell struck a harder line. He stressed that the Fed's policymakers have seen little progress in their efforts to control inflation and would likely have to send rates even higher than they thought they would at their last meeting in September.

“We still have some ways to go,” he said. “Incoming data since our last meeting suggests” that the officials might have...