The U.S. central bank, which delivered a series of 75-basis-point and 50-basis-point

 The U.S. central bank, which delivered a series of 75-basis-point and 50-basis-point 

rate hikes last year in an effort to bring inflation back down to its 2% target, announced a smaller quarter-percentage-point increase last week. The Fed's benchmark overnight interest rate is now in the 4.50%-4.75% range.

That increase in borrowing costs was followed just a couple of days later by an employment report showing a gain of 517,000 jobs in January, nearly three times the forecast of analysts polled by Reuters. The jobs data raised questions as to whether the 25-basis-point hike was the right move, and whether the labor market's resiliency in the face of stiff monetary policy tightening might cause the Fed to be more aggressive over time.

Fed officials hope their rate rises will better balance supply and what they see as overly strong levels of demand in the economy, and they expect unemployment to rise as part of this process from its current ultra-low level of 3.4%.