The U.S. Federal Reserve on Wednesday (November 2) raised its benchmark interest rate by 75 basis points for the fourth time in a row, but signaled that it may reduce the rate hike soon.

The Fed raised its key short-term interest rate range to 3.75% to 4%, the highest in 15 years. This is the sixth time this year that the Federal Reserve, the equivalent of the U.S. central bank, has raised interest rates. The Fed's successive rate hikes have made home mortgages and other consumer and business loans more expensive and heightened the risk of a recession.

Higher prices and higher borrowing costs have undermined Democrats' ability to use a strong job market as their campaign advantage. Democrats are trying to maintain control of Congress. The midterm elections come to a close next Tuesday, with Republican candidates lashing out at Democrats over serious inflation .

The Fed released its statement Wednesday after holding its latest policy meeting. Many economists expect Fed Chairman Jerome Powell to signal at a news conference that when the Fed next raises rates, expected in December, it might raise rates by just 50 basis points, while Not 75 basis points.

The Fed's usual practice is to raise interest rates in increments of 25 basis points. But Powell led the Fed to ramp up rate hikes in an attempt to slow borrowing and spending and ease price pressures after misjudging inflation last year as temporary.

The Fed's latest rate hike announcement on Wednesday came amid growing concerns that the U.S. central bank may tighten credit so much that it derails the economy. The U.S. government has reported that the U.S. economy grew in the last quarter and employers are still hiring at a solid pace . But the housing market has collapsed and consumer spending has barely picked up.

One reason Fed policymakers may feel the need to reduce rate hikes soon is some tentative signs that inflation is likely to start fading in 2023. Squeezed by higher prices and higher borrowing costs, consumer spending has risen only marginally. Supply chain congestion is easing, which means less shortages of goods and parts. Wage growth is plateauing and a subsequent downward trend would reduce inflationary pressures.

Still, the job market remains strong, threatening to make it harder for the Fed to cool the economy and tame inflation. On Tuesday, the government reported that more business jobs were unfilled in September than in August. Currently, there are 1.9 available jobs for every unemployed worker, an unusually large number of jobs.

Such a high percentage means employers are likely to continue to increase pay to attract and retain workers. Increases in labor costs are often passed on to consumers in the form of higher prices, thus fueling inflation.