Federal Reserve officials raised interest rates by a quarter-point on Wednesday, the 10th straight increase in an aggressive campaign to tame rapid inflation. But they also opened the door to a pause as their policies combine with bank turmoil to weigh down the economy.

Central bankers lifted rates to a range of 5 to 5.25 percent, a level they have not reached since the summer of 2007. The move capped the fastest series of rate increases since the 1980s as central bankers attempt to cool price increases by slowing growth.

But in their statement announcing the decision, policymakers also tempered language around future rate increases, saying that additional moves “may” be appropriate. Jerome H. Powell, the Fed chair, underscored in a news conference following the release that any additional changes would hinge on incoming economic data.

Taken together, those statements were a meaningful shift in the Fed’s stance. For months, officials had assumed that additional increases would be needed. Now, they could stop raising interest rates at any upcoming meeting — perhaps as soon as their gathering on June 13-14.

Yet central bankers were careful to keep their options open at a hugely uncertain economic moment, suggesting that they could continue to raise rates if the economy and inflation prove hot.

“A decision on a pause was not made today,” Mr. Powell said at his news conference. “We’ll be driven by incoming data, meeting by meeting, and we’ll approach that question at the June meeting.”

Stocks, which initially reacted positively to the Fed’s statement, slumped after Mr. Powell’s remarks suggested that a gentler rate path was not guaranteed. The S&P 500 ended the day down 0.7 percent.

The Fed’s careful stance reflects the complicated set of challenges that central bankers are confronting. Inflation remains well above their 2 percent goal even after recent moderation, and growth has shown signs of resilience in spite of the central bank’s aggressive rate moves. At the same time, tumult in the banking sector could slow lending and increase the odds of a recession, and an impending debt limit showdown could spark turmoil in markets among other risks.

Fed officials are trying to figure out how much they expect the economy to slow in light of those developments — and what that means for policy.

“We have credit conditions tightening not just in the normal way, but perhaps a little bit more,” Mr. Powell said. “We have to factor all of that in.”

Since early March, three large banks have collapsed and required government intervention. Mr. Powell suggested that trouble in the sector was causing at least some banks to pull back on extending credit. But he was clear that the extent of the impact was uncertain.

If consumer spending continues to chug along in spite of the banking upheaval and higher interest rates, it could allow companies to continue raising prices. In that case, the Fed may need to do more to make sure that inflation comes back under control. But if the economy is barreling toward a recession in light of recent developments, the Fed might instead strike a more cautious stance.

Krishna Guha, head of the global policy and central bank strategy team at Evercore ISI, said Mr. Powell’s remarks signaled that the Fed “is not sure it’s done, but thinks it might be.”

When the Fed raises interest rates, it makes it more expensive, and often more difficult, for families to take out loans to buy houses or cars, or for businesses to raise money for expansions. That slows both consumer spending and hiring. As wage growth sags and unemployment rises, people become more cautious and the economy slows further.

That chain reaction can be painful. When Paul Volcker’s Fed raised interest rates to nearly 20 percent in the early 1980s, it helped to push joblessness above 10 percent. But today’s Fed does not expect to raise interest rates nearly that high, and officials have been hoping they can engineer a “soft landing”: a situation in which the economy slows enough to lower inflation back to normal, but not so much that lots of people lose their jobs.

Mr. Powell has maintained that it might be possible to slow the economy without causing a recession, a view he reiterated on Wednesday. Fed staff members, by contrast, think a mild recession is likely this year, Mr. Powell said.

Given the possibility of a downturn, the Fed’s recent rate moves are drawing increased scrutiny — including from Democrats in Congress. Many are questioning whether the central bank is risking a serious recession that might painfully push up unemployment by lifting borrowing costs at a time when economic challenges abound.

The Fed’s latest rate move was “imprudent and only adds to the growing risks facing the economy,” Brendan F. Boyle, the ranking member of the House Budget Committee and a Pennsylvania Democrat, said in a release following the decision.

Achieving a gentle economic slowdown could be more complicated in light of recent bank troubles. Fed rate moves have played a role in the problems: Many of the banks under stress in recent weeks have suffered because they did not adequately protect themselves against rising interest rates, which have reduced the market value of their older mortgages and securities holdings.

And there were already other signs that the Fed’s moves — which take time to have their full effect — were beginning to hit the economy. More-expensive mortgages have translated into a meaningful slowdown in the housing market. Hiring is gradually moderating, and fewer jobs are going unfilled.

But on the other hand, inflation has been rapid for two years now and is showing staying power. Price increases are increasingly driven by service industries like travel and child care, rather than temporary supply shortages or oil price spikes. That could make today’s inflation difficult to fully stamp out.

The Fed chair said he and his fellow officials thought inflation would take time to come down. It could be that demand will need to slow more, he added, and that the labor market will need to soften to bring price increases back to a normal level.

“In that world, it wouldn’t be appropriate for us to cut rates,” he said.

But markets see things differently. Investors are largely betting that Fed officials will not raise interest rates further this year, and some predict a rate decrease as soon as this summer. By the end of the year, many expect rates to be well below their current level.

Those expectations could mean, in part, that investors have become nervous about a possible debt limit default. The Treasury announced this week that the government could run out of space to keep paying its bills as soon as June 1, and analysts warn that brinkmanship over raising it could roil markets and even imperil the economy.

Mr. Powell was repeatedly asked about the debt limit during his news conference, and he said that it was not his place to give lawmakers advice — but that it was essential to raise the debt limit, and that if Congress failed to do so, no one should have confidence that the central bank could use its powers to stem the fallout.

“We shouldn’t even be talking about a world in which the U.S. doesn’t pay its bills,” Mr. Powell said.

Madeleine Ngo contributed reporting.