Fed delivers fourth 75 bp hike, signals scale-back coming

NEW YORK (Reuters) - The Federal Reserve on Wednesday raised interest rates by three-quarters of a percentage point as it continued to battle the worst outbreak of inflation in 40 years, but signaled future increases in borrowing costs could be made in smaller steps to account for the "cumulative tightening of monetary policy" it has enacted so far.

The policy decision set the target federal funds rate in a range between 3.75% and 4.00%, the highest since early 2008. The U.S. central bank has raised rates at its last six meetings beginning in March, marking the fastest round of rate increases since former Fed Chair Paul Volcker's fight to control inflation in the 1970s and 1980s.

In a press conference after the meeting Fed Chair Jerome Powell cautioned against any sense the central bank will soon move to the sidelines. "It is very premature to be thinking about pausing" on the effort to lift the federal funds target rate, he said.