Key Issue as Fed Meets this Week: When to Slow Rate Hikes?

WASHINGTON — The Federal Reserve may reach a turning point this week as it announces what’s expected to be another substantial three-quarter-point hike in its key interest rate — its fourth straight, according to an Associated Press report.

Fed officials will likely engage in a fraught debate over whether it may soon be time to slow its rate hikes, which are intended to cool the worst inflation in four decades but are also raising the risk of a recession.

At a news conference Wednesday after the Fed’s latest meeting, Chair Jerome Powell could signal a forthcoming shift to smaller rate increases. Doing so would give officials time to assess the impact of the hikes.

Powell won’t explicitly spell out the Fed’s likely next moves. But economists say he could acknowledge that officials are discussing a downshift to a half-point rate increase in December. The Fed’s hikes have already led to much costlier borrowing rates, ranging from mortgages to auto and business loans.

Read the full Associated Press report.