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The Federal Reserve is expected to keep its key interest rate at a 22-year high on Wednesday but signaled it remains willing to further tighten monetary policy as it debates how much more it can slow the U.S. economy.

The Federal Open Market Committee is expected to forego a rate hike after its latest two-day meeting, keeping the benchmark interest rate between 5.25 and 5.5 percent and reaffirming the U.S. central bank’s strategy to tread more cautiously at such a late stage in its historic battle against inflation.

Since March 2022, the Fed has waged one of the most aggressive campaigns to curb consumer and business demand in decades as it battles price pressures that have proven far more persistent than expected.

The decision will come Wednesday as the Fed releases a new list of officials’ individual economic forecasts that are expected to show that growth will be stronger than predicted in the last forecasts released in June and that there is broad support for interest rates to rise reaching their peak between 5.5 -5.75 percent. This corresponds to a further interest rate increase of a quarter point this year.

But it is by no means guaranteed whether the Fed will further tighten its monetary policy. Officials are increasingly focused on the downside risks facing the world’s largest economy, even as they remain alert to the threat of high inflation becoming entrenched.

Officials are also aware that the effects of months of higher interest rates may only now be apparent, such as in the slowdown in the U.S. labor market. New headwinds to growth have also emerged, including the resumption of student loan repayments, an unresolved autoworker strike and a looming government shutdown.

Officials are weighing those concerns against data showing demand remains robust in many sectors, fueling strong consumer spending and potentially hampering inflation’s decline to the central bank’s long-standing 2 percent target.

A rise in oil prices driven by recent supply cuts has also raised concerns amid fears it could raise the cost of a wider range of goods and services.

While traders in the Fed funds futures markets largely expect the Fed to keep interest rates at current levels well into 2024, most leading academic economists recently from the Financial Times and the Booth School of Business at the University of Chicago believe that the central bank still has more work to do to curb inflation.

Most of the economists surveyed expect another quarter-point rate hike to be imminent, and another large cohort expects the Fed to make two or more rate hikes of that magnitude. The majority of respondents believe the Fed will not make its first rate cut until the third quarter of next year or later.

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