Federal Reserve officials signaled their aggressive campaign to curb inflation could be entering its final phase even as they delivered their fourth straight 75 basis-point interest-rate increase.
While central bankers said that "ongoing increases" will still likely be needed to bring rates to a level that are "sufficiently restrictive to return inflation to 2% over time," they added fresh language to their statement after a two-day meeting in Washington.
"The pace of future increases" in borrowing costs would take into account the cumulative tightening of monetary policy, the lag with which it affects the economy and developments in the economy and finance, they said.
The new commentary by the Federal Open Market Committee comes amid still-strong readings on inflation and jobs, even as sectors like housing and manufacturing have slowed substantially.
The addition will spur speculation that Fed Chair Jerome Powell and colleagues will slow the pace of rate increases with many Wall Street economists anticipating they will downshift to a 50 basis-point increase when they next gather in December.
In financial markets, swaps traders cut the amount of pricing in for the December policy meeting and pushed where they see the peak rate for the cycle to below 5% from around 5.05% earlier Wednesday.
Yields on two-year Treasuries plunged, while the S&P 500 index rallied and the dollar index slid.
The unanimous decision lifts the target for the benchmark federal funds rate to a range of 3.75% to 4%, its highest level since 2008.
The statement firmly committed policymakers to their campaign to curb inflation, but acknowledged that interest-rate increases act with a lag.
Powell will have a chance to elaborate on the outlook for future meetings at his press conference at 2:30 p.m. in Washington.
Election Near
Officials, fighting to curb inflation running near a 40-year high, gathered days before midterm U.S. congressional elections in which anger over price pressures has been a dominant theme.
