The US Federal Reserve has hiked interest rates again, warning that more hikes will be needed to curb the rapid pace of inflation.
But policymakers are starting to tread more cautiously as there are signs the country’s worst inflation in decades may be easing.
They agreed to raise the bank’s interest rate by 0.5 percentage points, taking it to a 15-year high.
However, this was a smaller increase than the recent announcements.
The Federal Reserve has raised interest rates at a historic fast pace this year in response to inflation that is at a 40-year high.
The latest hike, the seventh in a row, raised the Fed’s target range to 4.25%-4.5% from near zero in March.
By raising the cost of borrowing, the Fed hopes to cool the economy and ease the pressures that are pushing up prices. But it wants to avoid triggering a more painful slow than necessary.
Central banks in other countries are struggling with similar risks.
The Bank of England, which has warned the country is facing its longest-ever recession, is expected to announce its own 0.5 percentage point hike on Thursday, after approving an even bigger hike last month.
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