The Federal Reserve is expected to approve its third consecutive interest-rate increase of 0.75 percentage point on Wednesday, while signaling plans to raise and hold its benchmark rate above 4% in coming months to battle inflation.
Investors see a small chance of a larger rate rise of a full percentage point, or 100 basis points, at the Fed’s policy meeting Tuesday and Wednesday. A few analysts have said last week’s report showing high inflation could force central-bank officials to debate the merits of the larger move. But others think surprising the public with a larger rate rise could fuel questions over the central bank’s broader strategy and tactics.
