Fed Chairman Jerome Powell warned that taming inflation could hurt US households.

Powell said decreasing inflation "means utilising our powers forcefully to balance demand and supply."

Higher interest rates, weaker GDP, and a deteriorating labour market will reduce inflation, said Powell.

"I'd view that as a willingness to see the jobless rate grow higher to reduce demand," said Rob Haworth

Powell called price stability "the cornerstone of our economy" with more emphasis than in past statements.

Powell did not indicate if the Fed's back-to-back 75-basis-point rate hikes would be repeated next month.

The PCE price index grew 6.3% from a year ago, less than June's 6.8% gain.

Hatfield: "Powell and the Fed felt hawkish." Even if they secretly support inflation, they won't say so.

Failure to restore price stability would be worse, he said, citing the Fed's inflation fight in the 1970s and 1980s.

Inflation expectations can become a harmful self-fulfilling prophesy.

Perception of the Fed's willingness to inflict pain on the economy to fulfil its mandate is as crucial as reality.

"Fortunately, the Fed hasn't lost credibility," Kroszner added.