Fed delivers another steep rate hike with more to come

The Federal Reserve delivered another steep interest rate increase, as expected, with its move to cool red-hot inflation taking on more weight amid the political maelstrom of key US midterm elections.

With high inflation squeezing American families of all political stripes, President Joe Biden faces a battle to avoid losing control of both chambers of Congress.

The Fed's aggressive rate hikes this year so far have not had a noticeable impact on prices, but they have stoked fears of an impending recession even as the job market remains strong.

The US central bank raised the benchmark borrowing rate by 0.75 percentage point -- the fourth straight increase of that size and the sixth hike this year -- in its all-out battle to tame inflation not seen since the 1980s.

The policy-setting Federal Open Market Committee (FOMC) said 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.

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

While the housing market has cooled sharply amid higher borrowing costs, key inflation measures show prices continue to rise and the labour market remains tight, with job openings rising and private hiring accelerating in October.