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The Federal Reserve is expected to again raise interest rates this afternoon as it continues actions to tame multi-decade highs in inflation.

The central bank will likely ratchet short-term borrowing costs up another 0.75% at the conclusion of its meeting Wednesday.

Doing so would lift the federal funds rate to a target range between 2.25% and 2.5%, matching highs from its most recent rate hiking cycle, which ended in mid-2019.

By making it more expensive to borrow, Fed Chairman Jerome Powell and his colleagues at the central bank hope to dampen the economic activity that has, in part, led price increases.

Inflation remains at levels unseen since the early 1980s, with prices rising 9.1% in June.

The question investors will be asking on Wednesday is: How much further will interest rates have to rise to cool inflation back to the Fed’s 2% target? And: can the Fed raise interest rates without tightening economic activity so much that it triggers its own recession?

The Fed will release its policy statement at 2 p.m. ET followed by Powell’s press conference at 2:30 p.m. ET.

Federal Reserve Board Chairman Jerome Powell speaks to reporters after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation, during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S., June 15, 2022. REUTERS/Elizabeth FrantzFederal Reserve Board Chairman Jerome Powell speaks to reporters after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation, during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S., June 15, 2022. REUTERS/Elizabeth Frantz

Federal Reserve Board Chairman Jerome Powell speaks to reporters in Washington, U.S., June 15, 2022. REUTERS/Elizabeth Frantz

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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