Top officials of the U.S. central bank are expected to raise the key interest rate slightly Wednesday at the end of two days of private meetings and debate.
Economists surveyed by news organizations say the rate will probably go up one quarter of a percentage point, to a range between 1.5 and 1.75 percent.That is still fairly low compared to the average rate during the past few decades.
The Federal Reserve tries to manage the economy to maximize employment and keep prices stable.
The Fed slashed interest rates nearly to zero during the financial crisis to simulate economic growth.But economists say keeping rates too low for too long could over stimulate the economy and push inflation up fast enough to damage the economy.
With the economy recovering from the economic crisis, unemployment at its lowest point in years, and inflation low, but rising, the Fed governors are nearly certain to raise the key interest rate Wednesday.Investors and economists are watching closely for word on how soon and how high future rate hikes will come.
They will get some insight late Wednesday when the Fed publishes updated economic assessments of growth, employment, and inflation.
The new chair of the Federal Reserve, Jerome Powell, will also meet with journalists to explain the Fed’s actions.This is Powell’s first such news conference.
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