The U.S. Federal Reserve (Fed) announced the fourth straight 0.75-point rate hike on Wednesday and signaled that more hikes would be necessary to tame inflation.

The latest three-quarter percentage point increase takes the benchmark lending rate to 3.75-4.0%, the highest since January 2008.

In a statement at the conclusion of its two-day policy meeting, the U.S. central bank said more rate hikes "will be appropriate" to achieve a "sufficiently restrictive" level to tamp down inflation, but it will consider the impact on the economy when deciding.

The Fed's aggressive rate hikes this year so far have not had a noticeable impact on prices, but increase the risk the U.S. economy could suffer a recession even as the job market remains strong.

The policy-setting Federal Open Market Committee (FOMC) signaled that more increases will be needed to tamp down rising prices but it will consider the impact on the economy when deciding on the pace of future moves – opening the door to the possibility it will implement smaller steps in coming months.

Political pressure

As central bankers walk a tightrope fighting inflation while avoiding tipping the economy into a recession, politicians are ramping up pressure on Fed officials amid growing worries of an economic downturn.

Biden faces growing voter frustration over high inflation and signs a "red wave" that could sweep the opposition Republicans to power in the House and Senate.

Republicans put the blame for inflation and slower growth squarely on Biden, while the president's Democrats worry the Fed moves will lead to higher unemployment.

Democratic Sen. Sherrod Brown urged the Fed last month to show commitment to its dual mandate – of promoting maximum employment and stable prices – and moderate the rate hikes.

"For working Americans who already feel the crush of inflation, job losses will make it much worse," Brown said in a letter to Powell.

But Powell has argued that allowing high inflation to become entrenched would inflict even more pain on American families and workers.

Oanda analyst Craig Erlam said it may be too late to avoid a recession "but the Fed has been very clear from the start that while a soft landing is the desirable and attainable outcome, getting inflation under control is the primary focus."