Fed expected to lift interest rates at Powell’s debut

Jerome Powell, the new chairman of the Federal Reserve,

The Federal Reserve will almost certainly raise interest rates Wednesday at Jerome Powell’s first meeting as chairman.

The question is what his plans will be for the central bank later this year, as the Fed wrestles with how to prevent the economy from overheating.

Some hints may come when Powell and members of the Federal Open Market Committee release their revised economic forecasts. The Fed is likely to stick with its three planned rate hikes this year for now, but may hint at a fourth.

The Fed will release its rate hike decision and updated forecasts at 2 p.m. ET. Powell will take questions from reporters at his first press conference a half-hour later at 2:30 p.m. ET.

Powell, who began a four-year term last month, has expressed confidence that the next few years will be “good years for the economy” and that many challenges for the economy have faded into the background.

That message has been echoed by Powell’s colleagues on the Fed board.

Fed Governor Lael Brainard, who has advocated slower rate hikes, has more recently expressed optimism about the trajectory of the economy. Those cheery comments suggest she may support faster action by the Fed to tighten monetary policy.

“Many of the forces that acted as headwinds to US growth and weighed on policy in previous years are generating tailwinds currently,” she said earlier this month in a speech pointing to the recent fiscal stimulus from tax cuts and higher spending.

Fed officials are assessing the impact of the $1.5 trillion tax cut enacted earlier this year. The Fed is also watching for signs that inflation is coming closer to the central bank’s target of 2%.