Federal Reserve expected to raise rates for first time in a year

The Federal Reserve is expected to raise its key interest rate for the first time in a year when its policy meeting ends Wednesday.

The move would lift the rate by a quarter point to a range between 0.5 percent and 0.75 percent, likely nudging up the cost of some consumer and business loans. The Fed last increased rates in December a year ago, when it hiked its benchmark rate from a record low set at the depths of the 2008 financial crisis.

Attention will revolve around what Fed official say Wednesday about the pace of future rate increases against the backdrop of Donald Trump's election. How the Fed manages its policies might not be clear even after it issues a statement and Chair Janet Yellen holds a news conference.

U.S. stock indexes slipped slightly Wednesday morning as investors waited for what's expected to be one of the most telegraphed rate increases in history.

Virtually all of Wall Street is forecasting that the Fed will raise short-term rates by a quarter of a percentage point. It would be the second rate increase in a year and just the second in a decade.

The Fed has kept short-term interest rates close to zero since the Great Recession in hopes of driving economic growth and averting a downward spiral in prices, a condition that economists call deflation.

The strengthening job market means investors see it as a nearly foregone conclusion that the Fed will announce a rate increase.

Perhaps more important will be clues about what the Fed sees for the future. Many investors are forecasting the Fed will raise rates one or two more times in 2017. It's walking a delicate balance: Higher interest rates make borrowing more expensive, which can slow corporate profits and economic growth, but one of the worst-case scenarios for the economy would be if inflation raced higher because the Federal Reserve was too slow to raise rates.

Monthly reports released Wednesday offered a mixed picture of the U.S. economy. Retail sales edged up by just 0.1 percent in November, a weaker showing than economists expected. Inflation at the wholesale level was higher than expected last month, though economists said it still looks fairly tame, while industrial production weakened.