The market expects the Fed to raise interest rates by 0.5 percentage points on Wednesday, but hinted that its fight against inflation is far from over, Hong Kong's Wande News Agency reported.

The Federal Reserve released new forecasts for interest rates and the economy at the end of its two-day meeting tonight. Fed officials said they would scale back the rate hike after raising interest rates by 0.75 percentage points four times in a row.

The latest inflation figures may give Fed officials some comfort, but they may not show it. The consumer price index (cpi) for November, released on Tuesday, shows that inflation is cooling but remains high at 7.1 per cent. That was down from 7.7 per cent in October and below the 7.3 per cent expected by economists.

"I don't think they can claim any victory in inflation yet. Aneta Aneta Markowska, chief financial economist at Jefferies, said inflation appeared to be peaking earlier this year. "it looked like it was over, but it growled back. "

Economists said the improvement in the inflation report could force Federal Reserve Chairman Jerome Powell to take a tougher tone when speaking to reporters at 2:30 et on Wednesday.

"this adds to the case for slowing down the pace of tightening," said David Page, head of macroeconomic research at AXA Investment Mangers, an Axa investment management company. The Fed has been saying for some time that it wants to slow the pace of tightening, giving them some excuses and reasons to do so. "

But Mr Page said improved inflation data could make Mr Powell's job more difficult.

"We have seen bond yields start to slow and the Fed will soon change its mind," Page said. This does not help the Fed manage short-term operations, and the greater the volatility in the market, may mean that the Fed must work harder to convince the market that there is more work to be done. "

Economists sayAn important part of the Fed's forecast will be new information about officials' views on the ceiling of the federal funds rate next spring. Fed officials are expected to raise their forecast to 5% from 4.6%, or even slightly higher. The target rate for federal funds is currently between 3.75% and 4%.

Markowska also believes the Fed will change the wording of its policy statement to reflect the end of its rate-raising cycle. For now, the Fed said in a statement that "a sustained increase in the target range would be appropriate" to meet the 2 per cent inflation target.

"We're too close to the end. They can't use that word. They can replace it with something more limited, "Markowska said. They might say that it is appropriate to raise interest rates' further'. "

Markowska said that when the announcement at 2 p.m. EDT is released, the market will regard it as a dovish position. "but if he sounds tough, there will be some wavering in the press conference," she said. "

"I think the most interesting thing will be the press conference," said Rick Rieder, chief investment officer of Blackrock's global fixed income division. ""I think we heard two different emotions from Powell from the recent press conference to the Brookings Institution. "

Mr Reid said he was surprised when Mr Powell hinted in comments after the last meeting that the Fed might tighten too much, raising interest rates too much, and then "recover". But then the chairman made a speech at the Brookings Institution on November 30.

"at the Brookings Institution, he seemed to imply that he didn't want to go there," Reid said. After Powell's comments, the market thought his position was more dovish, and the stock market rebounded.

"so I think the tone of how far they need to go will be the key," Reid said. "