So, the US Federal Reserve did what was broadly expected and raised official interest rates by 0.25 of a percentage point early this morning to a 4.75-5 per cent range.

Economists generally described the move as "dovish" — that's the jargon for not very aggressive.

Basically, the Fed was previously thinking of raising rates by half a percentage point, until Silicon Valley Bank and a bunch of other regional US banks faced a mass withdrawal of deposits, causing a few to collapse while others teeter on the brink.

That banking crisis is what's triggered this more cautious approach.

Some thought the Fed might pause its interest rate rises altogether, but headline inflation in the US is still at 6 per cent and slow to come down, prompting the Fed to move again.

The big change though was in the central bank's language.

Last meeting it said, "ongoing increases in the target range will be appropriate."

This meeting it said, "some additional policy firming may be appropriate."

Obviously, "may" leaves open the space for no more rate hikes, and "policy firming" implies fewer rate hikes than "ongoing increases".

Unlike the Reserve Bank of Australia, the Fed publishes its committee members' future interest rate projections.

The latest "dot plot" implies one more rate hike to 5-5.25 per cent, with rate cuts next year to 4.25 per cent, rates falling further to just above 3 per cent in 2025 and settling at 2.5 per cent over the long term.

But many economists, such as Andrew Hunter from Capital Economics, expect rate cuts to arrive sooner.

"Even before the crisis most leading indicators suggested the economy was at high risk of recession this year and, with recent events likely to hit confidence and result in a significant further tightening in credit conditions, those risks have risen further," he wrote.

"With that economic weakness likely to accelerate the downward trend in core inflation, the upshot is that we still think that the Fed will be cutting rates again before the end of this year, sooner than officials' own projections imply."

And why do we care in Australia?

What the US does with interest rates has huge effects on international money flows and exchange rates.

If the Fed does indeed pause after this rate hike, or soon, then it will relieve one source of pressure on the RBA to keep hiking.