Four months ago, Federal Reserve Chair Jerome Powell stressed massive rate hikes worth three-quarters of a point were unlikely to be the norm. Now, it’s a move consumers and investors have come to expect — unless the chief central banker gives them a heads up.

In early November, the Federal Open Market Committee (FOMC) is likely going to raise interest rates by another 0.75 percentage point for the fourth straight meeting. The move would take its benchmark interest rate that influences almost all consumer borrowing costs in the economy past levels not seen since a brief period between late 2007 and early 2008.

But as recession risks in the U.S. rise and turmoil mounts across the globe, Fed watchers will be focused on whether this month’s rate move could be the last hike of this size. Before the year comes to a close, the Fed is expected to start debating when it should begin hiking rates in smaller increments — by half a point or even by the more traditional quarter point. The question, however, is whether the Fed is in a hurry to slow down as the labor market remains robust and inflation stays hot.

“When you’re putting out a fire, you’re not focused on the water damage,” says Greg McBride, CFA, Bankrate chief financial analyst. “The Fed is still focused on the blazing inferno that is inflation. But once the fire is out, then you’re really worried about the water damage.”

Here are the three biggest questions as we approach the Fed’s November meeting, including what could come next and what could knock officials off course.

1. Officials are likely to approve the fourth 75-basis-point rate hike of the year, but what comes next?

The Fed looked set to lift interest rates another three-quarters of a point at its penultimate gathering of the year even before consumer prices in September rose a faster-than-expected 8.2 percent from a year ago.

But what’s not so certain is how big subsequent rate hikes at meetings beyond could be — and how many more are in store.

Projections updated at the last Fed gathering put the U.S. central bank’s key benchmark interest rate in a target range of 4.25-4.5 percent by the end of the year, 1.25 percentage points higher than it is now. Simple math suggests one 75-basis-point hike followed by a slightly slower 50-basis-point increase would do the trick.

But the problem with predictions is, they have a quick expiration date — especially now, when the economy has hardly evolved the way officials expected.

Price pressures cooling from their June high of 9.1 percent is perhaps the only encouraging sign for U.S. central bankers on the inflation front. Under the hood, prices are picking up in other key corners of the economy, especially in services, rent and health care. Excluding the volatile food and energy categories most impacted by supply-chain bottlenecks, so-called core inflation surged for a second straight month in September to 6.6 percent, a fresh 40-year high.

Some officials are sounding the alarm that it might call for something more aggressive in December. Both Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard both suggested in October they’d favor 75-basis-point increases in December.

Others on the Fed’s rate-setting committee appear cognizant of the risks of doing too much, highlighting how the higher rates climb, the harder it could be to agree on policy.

“The time is now to start planning for stepping down,” San Francisco Fed President Mary Daly said during a Friday talk in California. “I want to make sure we don’t over-tighten just as much as I want to make sure we don’t under-tighten.”

Yet to chime in, however, is Fed chief Powell.

Any clues he gives could matter more than the rate announcement itself. Based on the median estimate in the Fed’s September projections, officials were expecting to take interest rates to a peak of 4.5-4.75 percent, also known as the “terminal rate.”

“They will need to split hairs here and act tough heading into this meeting,” says Scott Anderson, chief economist at Bank of the West. He expects a half-point hike in December and one more quarter-point increase in February of 2022, a level rates will stay at until 2024.

“Just as they scale back, they’re going to have to say, ‘We’re not done hiking rates,’” Anderson adds. “But the need for those emergency, 75-basis-point hikes is probably not as necessary as they approach the terminal rate for this cycle.”

2. Will hot inflation keep the Fed from pausing rate hikes next year?

The Fed never planned to raise interest rates forever. Rather, policymakers have just been running away from the zero-lower bound — or, simply, the rock-bottom level interest rates had been in between March 2020 and March 2022 to get the economy through the worst of the pandemic. Those same near-zero interest rates contributed to today’s decades-high inflation.

But borrowing costs aren’t stimulating the economy the way they were. In September, they officially passed a key threshold known as the “neutral rate of interest.”

“They had to play catch up, run the hurry-up offense and raise rates in big chunks,” McBride says. “You don’t necessarily have to do that once rates get to restrictive territory and have so much of this cumulative action in the pipeline.”

Some experts say September’s hot inflation report won’t kick that conversation down the road. The Fed might now have the flexibility to wait and see how interest rates are impacting the financial system before approving even more rate hikes, helping it avoid doing too much, too quickly.

“Another 75 basis points in December may show you’re panicking,” Anderson says.

Others, however, suggest it might be too soon to look like you’re about to pull back, especially without having lower inflation to prove it’s the right move.

“There’s really been no time allowed to see the impact; the Fed has been full-speed ahead,” says Kristina Hooper, chief global market strategist at Invesco. “We haven’t seen the data yet emerge that would allow for any kind of real pivot.”

It highlights the often-complex psychological component of monetary policy. Just as important as raising interest rates is acting tough on inflation.

A Fed seen as being lenient on inflation could lead to the very outcomes that exacerbate it. The S&P 500, for example, rallied quickly on expectations that the U.S. central bank might soon start slowing how much it’s hiking rates. Those same rallies were paired with falling Treasury yields and mortgage rates, according to Bankrate data.

But hopes of a Fed pivot were quickly dashed when the Fed gathered for its August annual monetary policy symposium in Jackson Hole, Wyoming, and then its September rate-setting meeting. At both events, Powell reiterated the Fed’s No. 1 goal was quelling inflation. It wasn’t a coincidence that the key stock index would later fall almost 17 percent from Aug. 16 through the end of September, eventually hitting a fresh low for the year on Oct. 12. Mortgage rates in the week that ended on Oct. 19 hit a new 16-year high of 6.92 percent in a Bankrate survey.

Yet, the S&P 500 is now staging a comeback in the week leading up to the Fed’s meeting, as talk of a slowdown in Fed rate hikes grows.

Powell will want to give Fed watchers plenty of notice before slowing rate hikes, but they’ll still want to look harsh on inflation and avoid signaling it’s a done deal until policymakers appear aligned and ready.

“Traders are chomping at the bit for the Fed to signal they’re close to the end,” Anderson says. “The easing of financial conditions could work against the Fed. [Powell] is going to have to thread the needle and send the right message to the market.”

A good middle ground could be pointing out just how important the next few months of data will be. Officials will have both the October and November employment and inflation reports before their final meeting of the year — and that data could do most of the Fed’s talking.

“They want to keep their options open,” McBride says. “The bottom line is, the Fed is figuring this out as they go just like the rest of us. I wouldn’t expect anything concrete. Even if we got it, that would certainly be subject to change.”

3. Challenges in other global economies could put the Fed in a tough spot

The Fed has been laser-focused on fixing inflation, but storm clouds are lighting up in the distance — and some are already raining down on other countries across the globe.

Emerging markets have been some of the first to get caught in the crossfire of rising rates. Higher interest rates hurt those countries, in part because they strengthen the U.S. dollar, making American exports more expensive. But when rates rise rapidly, liquidity can also be a challenge, as can the cost of financing outstanding debt, according to Fed research from June 2021.

“It’s monetary-policy whiplash, and that can easily be a catalyst for something breaking somewhere around the world,” Hooper says. “There’s always that potential for contagion. We’re in an interconnected global market.”

The Fed also hasn’t moved alone, with global central banks around the world from Canada to England also following suit with similar rapid rate increases to cool their own inflation challenges. Nine central banks in advanced economies accounting for half of global GDP have raised rates by 1.25 percentage points or more in the past six months, according to a Fed analysis from Vice Chair Lael Brainard.

Those challenges are piling on top of existing food and fuel shortages, exacerbated first by the coronavirus pandemic and then later the war in Ukraine.

“Rapid interest rate increases and fiscal tightening in advanced economies combined with the cascading crises resulting from the COVID pandemic and the war in Ukraine have already turned a global slowdown into a downturn with the desired soft landing looking unlikely,” the United Nations Conference on Trade and Development warned in its annual report for 2022.

Like clockwork, central banks in other developing countries — from Brazil to South Africa — have started to raise rates to keep their currencies on par with that of other countries.

But even the world’s sixth largest economy is facing some trouble. The Bank of England had to stage a massive, temporary bond market intervention after backlash from former Prime Minister Liz Truss’ tax cut and spending plan sent bond yields soaring.

“As monetary policy tightens globally to combat high inflation, it is important to consider how cross-border spillovers and spillbacks might interact with financial vulnerabilities,” Brainard said at a New York Fed research conference on Sept. 30.

But she reiterated inflation is the top concern: “Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back to target. For these reasons, we are committed to avoiding pulling back prematurely,” Brainard added.

The question now is whether any of those global challenges could spill over onto U.S. shores — or worse, if the U.S. could be vulnerable to an unforeseen financial crisis. These could complicate the Fed’s goals of cooling inflation, which requires higher interest rates. And if the crisis were severe enough, the Fed would likely have to make a sacrifice: helping out the economy with a potentially inflation-fueling policy or turning a blind eye.

“If something were to happen to undermine financial stability, the Fed would certainly react,” McBride says. “I would not expect them to be proactive on that front — as long as inflation is running as hot as it is. It’s certainly a secondary consideration to the job at hand, which is getting inflation under control.”

Bottom line

Consumers and investors don’t need to be reminded of just how much the Federal Reserve has lifted interest rates this year.

At the start of the year, homebuyers could easily finance their homes with a near-3 percent interest rate, among some of the lowest levels ever. Now, they’re paying close to 7 percent.

Consumer borrowing costs from car loans to credit cards are all but certainly going to climb higher as the Fed marches on with interest rate hikes. And while mortgage rates could start to pull back as the economy slows, most will likely stay there as long as the Fed’s rate remains high.

Savers, however, have had a rewarding few months. Bank yields have more than doubled since the start of the year, while other accounts at online banks on the market are offering annual percentage yields (APY) at 3 percent or higher. Financial institutions adjust their offerings at their own discretion, but higher rates for longer suggests consumers likely won’t have to part ways with the best deals they’ve seen in years.

The booming job market, however, is most at risk in a slowing economy, underscoring the importance of strengthening your skill sets and saving for emergencies.

“A slower pace of rate hikes is certainly in the offing for 2023, and an eventual move to the sidelines, but it’s important not to miss the forest through the trees,” McBride says. “They’re still going to be raising rates for a while, and even when they stop, rates are going to be high. We can’t get distracted by an eventual Fed move to the sidelines when there’s still very real costs and risks attached to higher cost of borrowing for households and businesses alike.”