WASHINGTON — There isn’t much suspense about what the Fed will announce when its latest policy meeting ends Wednesday: That it’s raising its key short-term interest rate for the third time in six months.
The job market — with unemployment at a 16-year low of 4.3 percent — has improved to such an extent that the Fed is thought to feel it’s time to modestly raise its benchmark rate again. The move, to a still-low range of 1 percent to 1.25 percent, will likely lead to somewhat higher rates on some consumer and business loans. The idea is to ensure that the U.S. economy doesn’t overheat.
But beyond the announcement of another rate hike, anticipation surrounds the possibility that the Fed could signal policy shifts in a statement it will issue, in updated economic forecasts and in a news conference with Chair Janet Yellen. Investors want to know, for example, how fast the pace of rate increases may be in coming months or whether Washington’s political paralysis has concerned the Fed.
Here are three things to watch for after the Fed’s meeting ends:
FUTURE PACE OF RATE HIKES:
After leaving its benchmark rate at a record low near zero for seven years, the Fed has raised rates three times, by a quarter-point each time — once in December 2015, again last December and a third time in March.
The Fed has previously forecast that it will raise rates three times in 2017.
Though investors have pegged the likelihood of a rate increase Wednesday at near 100 percent, there’s much less certainty about the prospect or timing of any further hikes. Some Fed watchers expect another increase in September. Others say…
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