The U.S. Federal Reserve on Wednesday implemented the 10th interest rate hike in about a year, hinting at a possible pause in its aggressive tightening cycle amid still elevated inflation, banking turmoil and growing recession risk.

In a widely anticipated decision, the Fed increased rates by 0.25 percentage point, bringing the federal funds rate to a new target range of 5 to 5.25 percent, as part of ongoing efforts to tamp down the worst inflation in decades.

Since March 2022, the Fed has increased rates by 500 basis points -- the fastest pace of monetary tightening in roughly 40 years.

In a statement after a two-day policy meeting, the Federal Open Market Committee (FOMC), the Fed's policy-setting body, deleted a sentence in the previous statement saying that the Committee anticipates that "some additional policy firming may be appropriate," and added that the Committee will determine "the extent to which additional policy firming may be appropriate."

In a press conference on Wednesday, Fed Chair Jerome Powell said that decision on a pause was not made and that the language change in the statement regarding future monetary policy was meaningful. Powell, however, didn't rule out the possibility of further rate hike, saying that the Fed's decision will be driven by incoming data.

With inflation still high, growth already slowing, and banking tumult not over, the U.S. central bank's next decision would be anything but easy.

"Inflation has moderated somewhat since the middle of last year," Powell told reporters at the press conference, "Nonetheless inflation pressures continue to run high and the process of getting inflation back down to 2 percent has a long way to go," he said.

The Consumer Price Index (CPI) rose at an annual rate of 5 percent in March, hitting its lowest level in almost two years. Even though it's much lower than the 9.1 percent peak in June last year, inflation remains well above the Fed's 2 percent target.

As the Fed raises interest rates to curb surging inflation, the economy has slowed significantly, with construction and manufacturing sectors -- among others -- showing signs of cooling, personal consumption slowing in February and March, and job openings in March hitting the lowest level in nearly two years.

Data from the Commerce Department showed that U.S. GDP rose at a paltry 1.1 percent annualized pace in the year's first quarter, marking a significant decline from last year's fourth quarter increase of 2.6 percent. The numbers missed economists' expectations of 2 percent.

Moreover, the Fed's historical tightening, which has pushed the central bank's benchmark rate to its highest in nearly 16 years, has resulted in some "side effects," notably in the banking industry. Many economists and analysts said the Fed's aggressive actions played a role in the recent failures of three U.S. banks.

Wednesday's rate hike has already drawn negative responses by some economists as being too "hawkish" and criticism from several Democratic members of Congress who want the central bank to halt rate increases they fret could spark an economic downturn.

"We strongly urge you to respect the Fed's dual mandate, pause your rate hikes, and avoid engineering a recession that destroys jobs and crushes small businesses," 10 senators and representatives, including Senator Elizabeth Warren, wrote in a letter Monday to Powell.

It seems to "ignore the likely damage" from a "regional bank-induced credit crunch and a looming debt ceiling showdown," both of which could "send shockwaves through the financial markets," Desmond Lachman, senior fellow at the American Enterprise Institute and a former official at the International Monetary Fund, told Xinhua.

He was referring to the game of brinksmanship that is predicted to occur between lawmakers in Washington over the debt ceiling, as well as the turmoil faced by some regional banks in the wake of the Silicon Valley Bank crash.

"By continuing to raise interest rates, the Fed is risking a hard economic landing," Lachman said.

Noting that the risks to the economy are growing, and the fear of a recession is very much present, Gregory Daco, chief economist at EY-Parthenon, said he thought the Fed would be prudent to pause now.

Lachman added that the Fed hinting at potential pause isn't enough. It would have been more appropriate for the Fed "to have clearly indicated that this was its last interest rate increase" and that it was carefully monitoring the ongoing regional banking crisis, Lachman said.

But some argued that the Fed's latest statement has allowed it to keep options open. "The statement provides a solid platform from which the Fed can move in any direction without unduly surprising markets," Quincy Krosby, chief global strategist at LPL Research, was quoted by CNBC as saying.