New Delhi, Sept. 18 -- The US Federal Reserve is unlikely to embark on an aggressive tightening cycle, with only one additional rate hike projected, even as energy prices remain the key risk to the inflation outlook and potential new tariffs could renew price pressures, according to an Axis Bank report.

The US Federal Open Market Committee (FOMC) unanimously raised policy rates by 25 basis points, citing a "timelier" return of inflation to its target. Notably, it was the first increase since 2023, as policymakers moved to address persistent inflationary pressures.

Axis Bank noted that while several inflation measures, including the closely watched Personal Consumption Expenditures (PCE) index, have remained above 2 per cent since 2020 a...