“As we go forward, of course we’re going to always be looking at what is the incoming data and economic information that we’re getting from our contacts telling us about where the economy is headed,” Cleveland Fed President Loretta Mester told reporters on Tuesday.

Mester said officials would adjust policy if inflation comes down faster than they anticipated. “On the other hand, if inflation doesn’t come down and we see that the pressures are still increasing, then that will help me evaluate where policy is as well,” she said.

Policymakers will get October and November consumer price readings before their Dec. 13-14 policy meeting.

If history is any guide, officials could forecast a higher terminal rate when they meet in December. A look at officials’ previous projections shows they have raised their expectations for how high they think rates will need to go with each update this year.

Six of the Fed’s 19 policymakers forecast the upper boundary of their target range for rates would reach 5% next year, according to estimates published in September. But in June, the highest projection called for a target range with an upper bound of 4.5% in 2023, and only one Fed official penciled that in. In March, the most hawkish officials saw rates reaching an upper bound of 3.75% next year.

The evolution of the Fed’s “dot plot,” as its known, illustrates how much officials have ramped up their efforts in the wake of surprisingly strong inflation. And with no relief in sight, Fed watchers say the central bank is likely to keep making big moves.

Investors expect Fed officials to raise rates by 75 basis points for the fourth straight time when they meet in early November with the same-sized move on the table for December, continuing the most aggressive tightening cycle since the 1980s. 

With the unemployment still low, the latest inflation reading suggests Fed officials may need to raise rates closer to 5% before they can pause, said Tiffany Wilding, North America economist for Pacific Investment Management Co. 

The Fed could consider slowing down or stopping the hikes next year if the US unemployment rate moves up and the economy contracts, she said. However, she said it would take significant labor market weakness for the Fed to back down.

Fed officials saw the jobless rate rising to 4.4% by the end of next year, according to the projections they released in September. It was 3.5% last month.