Skip to content
Economics
Central Banks

Fed’s New Normal for Pace of Tightening May Be Hard to Escape

  • Hot economy risks locking Fed into unusually-large rate hikes
  • US central bank ‘could miss the off-ramp,’ analyst says
The Marriner S. Eccles Federal Reserve building in Washington, D.C.

The Marriner S. Eccles Federal Reserve building in Washington, D.C.

Photographer: Al Drago/Bloomberg

Federal Reserve officials risk lacking an easy exit from their new path of unusually large interest rate increases, meaning they could end up over-tightening and pushing the US economy into recession.

The US central bank hiked its benchmark rate by three-quarters of a percentage point -- triple the usual amount -- for a third straight meeting Wednesday and surprised investors by signaling a fourth such increase at its meeting in November was likely.