Chair Powell faces a communications challenge at briefing

Fed may slow soon, but doesn’t want easy financial conditions

The Federal Reserve looks set to deliver a fourth straight super-sized rate increase with Chair Jerome Powell repeating his resolute message on inflation and opening the door to a downshift -- without necessarily pivoting yet.

The Federal Open Market Committee is expected to raise rates by 75 basis points on Wednesday to a range of 3.75 to 4%, the highest level since 2008 as the central bank extends its most aggressive tightening campaign since the 1980s.

The decision will be announced at 2 p.m. in Washington and Powell will hold a press conference 30 minutes later. No fresh Fed forecasts are released at this meeting.

The central bank chief may emphasize policymakers remain steadfast in their inflation fight, while leaving options open for their gathering in mid-December, when markets are split between another big move or a shift to 50 basis points.

In July, his comments were wrongly interpreted by investors as a near-term policy pivot, with markets rallying in response, which eased financial conditions -- making it harder for the Fed to curb prices. The chair may want to avoid a misstep, even if he suggests a shift to smaller increases at upcoming meetings.

“They may want to go slower just in the interest of financial stability,” said Julia Coronado, the founder of MacroPolicy Perspectives LLC. “It’s a challenge for messaging because they don’t want to ease financial conditions significantly. They need tight financial conditions to keep cooling the economy off. So he doesn’t want to sound dovish, but he may want to go slower.”

Powell is trying to curb the hottest inflation in 40 years amid criticism he was slow to respond to rising prices last year. The hikes have roiled financial markets as investors worry the Fed could trigger a recession.