The U.S. Federal Reserve raised the benchmark interest rate by 75 basis points for the second consecutive month on Wednesday as it intensifies the fight against 40-year-high inflation.
The Federal Open Market Committee voted unanimously to lift its federal funds rate to a range between 2.25% and 2.5%, bringing it in line with the Fed's long-run "neutral" rate. The size of the increase was largely in line with market expectations.
The two consecutive large rate increases raise concern about a recession, but the Fed appears focused on bringing inflation under control for now.
"We will be looking for compelling evidence that inflation is moving down," Chairman Jerome Powell told a press conference after the announcement, noting that the pace of additional rate increases will depend on incoming data.
Acknowledging that Wednesday's move is the second "unusually large" increase, Powell hinted that another big one "could be appropriate" at the Fed's September meeting but said that decision has yet to be made.
Powell also signaled the possibility of a slower pace for future rate increases.
"As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation," he said.