Fed lifts rates by 50 bps, warns of more hikes

STORY: The Federal Reserve on Wednesday announced yet another interest rate hike, and forecast further hikes through the end of next year in what it cast as a long and likely painful campaign to rein in inflation...

"Today the FOMC raised our policy interest rate by a half-percentage point. We continue to anticipate that ongoing increases will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive, to return inflation to two percent overtime."

The 50 basis point rise did mark a scaled back hike from the three-quarters-of-a-percentage-point rate increases delivered at the last four Fed policy meetings and signaled that the Fed might be taking a new, slower pace to tightening as recent economic reports show price pressures easing across the economy.

Still Federal Reserve Chairman Jerome Powell made clear prices are still rising too fast, and taming inflation will take time, and come at a cost.

"Reducing inflation is likely to require a sustained period of below-trend growth, and some softening of labor market conditions. (EDIT) "We will stay the course until the job is done."

In a little less than a year, the Federal Reserve has raised interest rates from near zero to over four-and-a-quarter percent, the highest level since 2007.

These moves come after dramatic rises in consumer prices - first dismissed by Powell as temporary - caught policymakers off-guard.

But higher rates are strong medicine, and risk triggering a recession. Powell said he did not forecast a downturn, but said the Fed's powers of foresight had their limits.

"I don't think anyone knows whether we're going to have a recession or not. And if we do, whether it's going to be a deep one or not. It's just not knowable."

The Fed said that recent reports of easing price pressures were encouraging, but that it expected inflation to remain above the target through the end of next year.