The Federal Reserve raised interest rates by a quarter percentage point and hinted it may be the final move in the most aggressive tightening campaign since the 1980s as economic risks mount.

“The committee will closely monitor incoming information and assess the implications for monetary policy,” the Federal Open Market Committee said in a statement Wednesday. It omitted a line from its previous statement in March that said the committee “anticipates that some additional policy firming may be appropriate.”

Instead, the FOMC will take into account various factors “in determining the extent to which additional policy firming may be appropriate.”

“That’s a meaningful change that we’re no longer saying that we anticipate” further increases, Chair Jerome Powell said at a press conference after the decision, when asked whether the statement is a signal that officials are prepared to pause rate increases in June. “So we’ll be driven by incoming data, meeting by meeting, and we’ll approach that question at the June meeting.”

The increase lifted the Fed’s benchmark federal funds rate to a target range of 5% to 5.25%, the highest level since 2007, up from nearly zero early last year. The vote was unanimous, and Powell said support for the 25 basis-point rate increase was “very strong across the board.”

Whether that rate will prove to be high enough to bring inflation back to the Fed’s 2% target will be an “ongoing assessment” based on incoming data, Powell said, adding later that Fed officials’ outlook for inflation does not support rate cuts.

Stocks fluctuated and bond yields fell as the Fed chief spoke.

Fed Raises Interest Rates by a Quarter Point | Rates are at the highest since 2007

Policymakers are resolved to ensure inflation will continue decelerating — potentially with costs to employment — even as the banking system endures ongoing stress, lawmakers step up criticism and the latest data suggest emerging weakness in the labor market.

Powell said bank conditions had “broadly improved” since early March, but said the strains in the sector “appear to be resulting in even tighter credit conditions for households and businesses,” following a tightening in credit over the past year.

“In turn, these tighter credit conditions are likely to weigh on economic activity, hiring and inflation,” he said. “The extent of these effects remains uncertain.”

Powell said Wednesday it’s possible the US could experience what he hopes would be a mild recession, but “the case of avoiding a recession is in my view more likely than that of having a recession.” Wage increases have been moving down, and job openings have declined but have not been accompanied by rising unemployment, he said.

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During a press conference on Wednesday, Federal Reserve Chairman Jerome Powell said that the central bank expects a “mild recession” this year due to the economic impact of COVID-19.

Powell noted that the severity and duration of the recession would depend on factors such as the effectiveness of measures taken to contain the virus and the measures taken by Congress to support the economy.

He also emphasized that the Fed is prepared to act aggressively to support the economy, including by cutting interest rates and providing liquidity to markets.

“We will use our tools and act as appropriate to support the economy,” Powell said. “The coronavirus poses evolving risks to economic activity, and the Federal Reserve is closely monitoring developments and their implications for the economic outlook.”

Powell’s comments came after the Fed announced an emergency rate cut on Tuesday, lowering its benchmark rate by half a percentage point to a range between 1% and 1.25%.

The move was aimed at easing market concerns about the economic impact of COVID-19, which has caused widespread disruptions to travel, supply chains, and consumer spending.

In addition to the rate cut, the Fed has also taken other measures to support the economy, including providing liquidity to banks and ramping up its purchases of Treasury securities.

The Fed’s actions are part of a broader effort by central banks around the world to counter the economic impact of the virus, which has infected over 100,000 people and caused over 3,500 deaths globally.

Despite the Fed’s efforts, however, many economists remain skeptical about the effectiveness of monetary policy in dealing with the economic fallout from the virus.

Some argue that fiscal policy will be more effective, particularly support for small businesses and direct cash payments to individuals.

The Trump administration and Congress are currently considering a range of measures to support the economy, including payroll tax cuts, paid sick leave for workers, and targeted industry bailouts.

Overall, the economic impact of COVID-19 remains uncertain, and will depend on a range of factors, including the spread and severity of the virus, the effectiveness of containment measures, and the level of government support for affected industries and individuals.