The head of the US Federal Reserve, Jerome Powell, has promised smaller rate hikes in the future.
"The time to taper rate hikes could come as early as the December meeting," Powell said at a Brookings event in Washington on Wednesday.
At the same time, however, he held out the prospect of further interest rate hikes.
"The timing for a moderation in the pace of rate hikes could be as early as the December meeting," Powell said in his speech.
“Given our progress in tightening policy, the timing of that moderation is far less important than how much further we need to raise rates to keep inflation under control and how long it will take to keep the policy on at a restrictive level.”
Inflation in America weakens
The interest rate peak is likely to be slightly higher than signaled in September.
At that time, the US Federal Reserve had forecast a median interest rate peak of 4.6 percent, according to the projections of the members.
After all, inflation is still too high, Powell said.
You need more signals for declining inflation.
At the most recent meeting in early November, the Fed raised its key interest rate sharply by 0.75 percentage points for the fourth time in a row.
The Fed has already raised key interest rates from almost zero to currently 3.75 to 4.0 percent this year.
The majority of the financial markets are expecting the Fed to raise its key interest rate by 0.50 percentage points in mid-December.
Inflation has already eased somewhat in recent months.
In October, the annual inflation rate fell to 7.7 percent.
In June it had still marked a 40-year high at 9.1 percent.
Dollar depreciates against euro
In his prepared speech, the Fed Chairman also went into the individual aspects of inflation, citing, among other things, only a slight decline in consumer prices, the increased cost of services, and in doing so he focused on the tight supply on the labor market.
"Excess retirements could now account for more than 2 million or as much as 3.5 million of the labor shortage," Powell said.
While economists see a recession as likely in the next 12 months, Powell said a so-called soft landing for the economy is "very plausible and still achievable."
The Fed's regional economic report, also released on Wednesday, says economic activity has been about the same or up slightly over the past few weeks from the previous report, below the modest pace of growth seen in the previous reporting period, which ran through October.
The higher interest rates make loans for investments and consumption more expensive, which in turn could slow down the economy.
The US dollar fell against its main competitors on the currency markets, and the euro also gained some ground following the publication.
US stock prices also rose.