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The six rate hikes the Fed has already imposed this year have raised its key short-term rate to a range of 3.75 percent to 4 percent, its highest level in 15 years.
After four straight three-quarter-point interest rate hikes, the Federal Reserve is set to announce a smaller half-point increase in its key rate Wednesday, a first step toward dialling back its efforts to combat inflation.
At the same time, the Fed is expected to signal that it plans more hikes next year than it had previously forecast to try to conquer the worst inflation bout in four decades. And most economists think Chair Jerome Powell will stress that the Fed will likely keep its benchmark rate at its high point through next year, even after the hikes have ended.
The Fed's decision Wednesday will follow a government report Tuesday that provided hopeful signs that inflation is finally easing from chronically high levels. Gas prices fell, the cost of used cars, furniture and toys declined, and the costs of services from hotels to airfares to car rentals dropped.