The Federal Reserve had made it abundantly clear — it will raise interest rates as much as necessary to curb inflation.

Yet the nation's monetary policy makers have had a tendency to "overshoot" when raising rates. Inflation is contained, yes, but the rates also serve as a brake on economic growth. Fed rate hikes can halt growth entirely, or even send the economy into a recession, if rates are raised too far.

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That's why stocks have been in a month-long tailspin as Fed Chairman Ben Bernanke talks tough on inflation. Yet even Wall Street economists expect Bernanke and other Fed officials to continue raising rates at their meeting June 28-29, and possibly at their August meeting as well.

"We disagree that more hikes are needed, but we also know that they're coming," said Michael Strauss, chief economist at Commonfund. "In fact, we believe if they go with a hike next week, that'll be overkill. But we fully expect them to go not only next week, but probably in August, too."

The nation's benchmark interest rate currently stands at 5 percent, and is expected to be raised by a quarter percentage point next week. An August hike would put the rate at 5.5 percent — at which point Wall Street expects the Fed to signal that it will stop.

Of course, there was debate at the beginning of the year that Bernanke would stop at 4.75 percent. Higher-than-expected inflation data and higher-than-average commodity prices have led Fed policy makers to speak out, warning that inflation poses a longer-term threat to the economy than slower growth.

Another part of the equation is Bernanke's need to establish his credibility as Fed chairman and as an inflation fighter.

"There's a necessity of an incoming Fed chairman to maintain credibility, and talking tough on inflation is part of that," said Anthony Chain, chief economist for JP Morgan Private Client Services and a former economist for the New York Federal Reserve Bank. "I'm inching and leaning toward them going with another rate hike in August."

Although the hikes are expected — UBS analysts said Monday that hikes in both June and August were likely — few agree that they're absolutely necessary to contain inflation.

"If you look at core inflation, it's still in excellent shape," Strauss said. "Studies show that inflation peaks six to mine months after the economic cycle peaks, so really, this should be about it. Anything more at this point is overkill."

It's considered likely that if the Fed raises rates in both June and August it will actually have to cut rates before Christmas, probably at its scheduled Dec. 12 meeting. However, economists say Bernanke would prefer to raise too much, then cut later, than to not raise rates enough and let inflation get out of hand.

"You've seen the Fed do it over and over again. They raise rates a bit too much, then adjust later," Chan said, noting that the full effect of rate hikes aren't felt throughout the economy for many months after the fact. "You go slow, with a quarter point each time. If you realize you have an oops on your hands and raised rates too much, it's easier to reverse course."

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