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The Federal Reserve is expected to raise interest rates for the first time in a year during a key policy meeting that ends Wednesday, the Associated Press reports.
According to Politico, markets are on edge as they await the Fed's outlook for the economy under President-elect Donald Trump, which is expected to see continued growth. But economists also expect to see higher levels of inflation, which would lead to even higher interest rates.
The economy has looked to be in very good shape since Trump was elected last month. The Dow Jones Industrial continues to break records almost daily as it nears 20,000.
Trump has also been busy making deals with companies — most notably Carrier Air Conditioning — to keep jobs in the U.S. from being outsourced overseas or to Mexico. The president-elect also plans to meet with top technology leaders on Wednesday in an effort to persuade them to keep their labor stateside.
Computer technology company IBM also announced on Tuesday a four-year plan to create 25,000 jobs in the U.S. under Trump's administration.
Following what economists call the "Great Recession," the Fed dramatically lowered interest rates in an effort to keep the American economy moving. But now that it has shown signs of recovery, economists believe many interest rate hikes are coming just as President Barack Obama leaves office.
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Going forward, the Fed is expected to feel pressure to continue raising rates thanks to a period of sustained economic growth and low unemployment. The Labor Department's first jobs report after Election Day showed that the economy added 178,000 jobs in November and the unemployment rate fell to 4.6 percent.
"When history is written, the meeting will be the one in which liftoff actually began — a sustained period of interest rate increases," Aaron Klein, a Brookings Institution fellow, told Politico.
Gus Faucher, deputy chief economist at PNC, echoed Klein.
"We're more likely to have more rate increases than we're expecting than to have fewer rate increases than we're expecting," he told Politico.
The Fed is also taking into account Trump's campaign pledges on taxes and an infrastructure stimulus as they examine how to execute monetary policy going forward into 2017 in response to Trump's policies.
Fed Chair Janet Yellen will announce the Fed's changes Wednesday afternoon during a press conference, where she is also expected to outline the direction she believes the U.S. economy is heading.
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Chris Enloe is a staff writer for Blaze News