The Federal Open Market Committee (FOMC) has hiked its key interest rates by 75 basis points on Wednesday to fight spiraling inflation.

Fed Chairman Jerome Powell's decision is considered the largest back-to-back rate increase in decades. In a press conference after the announcement, he said that there are too many areas in the economy that are performing too well and he does not think that the US is currently in a recession.

"It's true the growth is slowing, and for reasons that we understand the growth was extraordinarily high last year at 5.5%. We would have expected the growth to slow and there is more slowing down of growth happening now. But if you look at the labour market, you have payroll jobs averaging 450,000 per month, and that's a remarkably strong level," the Fed chairman said.

"All of the wage measures that we are tracking are running very strong. So, this is a very strong labour market with 2.7 million people hired in the first half of the year. It doesn't make sense if the economy would be in recession with this kind of thing happening. So, I don't think the US economy is in recession right now," he added.

The annual inflation rate in the US accelerated to 9.1% in June of 2022, the highest since November of 1981, from 8.6% in May and above market forecasts of 8.8%.

However, investors are looking forward to today's key US GDP numbers, which could give an indication of whether the economy has slipped into a recession.

"I would say generally the GDP numbers do have a tendency to be revised significantly. It's very hard to cumulate US GDP; it's a large economy and lot of work and judgement goes into that. you tend to take first GDP reports with a grain of salt. But of course it will be something we will be looking at," Powell said.

Economists polled by Reuters expect the US GDP grew, if slowly, in the three months from April through June.

But about a quarter of those polled estimate that it shrank for a second consecutive quarter, and by an often used rule of thumb, that would mean the US is in recession.

The National Bureau of f Economic Research defines recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”

(Reporting by Seban Scaria; editing by Daniel Luiz)