The Federal Reserve is expected to refrain from issuing another large interest rate increase at its September meeting after Chair Powell warned of some pain to Americans.
The probability of a 50 basis point rate hike next month was shown by the FedWatch tool.
The rate increase of 75 basis points was down from the previous day.
The Federal Open Market Committee will meet in September and is expected to raise the rate five times. At its meetings in June and July, the Fed raised the fed funds rate. In June, the hike was three-quarters of a percentage point.
Powell stressed the central bank's resolve to drag down inflation that's sitting around a four-decade high. Interest rates have been raised by the Fed to slow activity in the world's largest economy.
Powell said that the next phase of policy tightening will bring some pain to households and businesses. Mortgage rates are going up and credit card debt is going up as a result of the rate hikes.
The pace of rate hikes will slow at some point.
Jeffrey Roach, chief economist atLPL Financial, said in a note that Powell stated that fighting inflation is more important than supporting growth.
The timing for slowing the pace of rate increases will be dependent on supply constraints. The supply chains should bring down inflation rates. The Fed will likely hike rates by 50 basis points in September and slow the pace to 25 basis points in later meetings, according to our view.
The central bank's preferred inflation gauge, the PCE, came in at a 4.6% rate in July, and was up 0.1% month over month. The reading was lower than Econoday's estimates.
The headline inflation rate that includes energy and food was 8.5% in July, down from 9% in June.
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