Powell says rate hike moderation may come by December

STORY: After imposing the fastest increases to interest rates since the 1980s, Federal Reserve Chair Jerome Powell said Wednesday that the central bank may be ready to scale back the pace of rate hikes in its fight to tame inflation possibly as early as next month.

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting."

Powell made those comments on Wednesday in a speech to the Brookings Institution think tank in Washington.

But while the Fed is considering smaller rate hike moving forward - perhaps 50 basis points instead of 75 - Powell said the fight against the fastest outbreak of U.S. inflation in decades was far from over.

"We will stay the course until the job is done. (FLASH) "Despite the tighter policy and slower growth over the past year, we have not seen clear progress on slowing inflation."

With a half-percentage-point increase expected at its December meeting, the Fed will have lifted its overnight policy rate from near zero in March to the 4.25%-4.50% range, the swiftest change in rates since former Fed Chair Paul Volcker was battling an even worse rise in prices.

Higher rates have made home mortgages and other forms of credit more expensive for consumers and businesses.

It has not, however, caused any appreciable impact on the U.S. job market, which remains robust. It has also had no convincing impact yet on inflation, leaving many to wonder how long the Fed might have to keep up the fight.

Still, Powell's remarks ignited a robust rally in equity and bond markets, which have taken a pounding this year on the back of the Fed's aggressive rate hikes with investors hoping that smaller rate increases – and eventually pausing them altogether-- might come sooner rather than later.