A police officer keeps watch in front of the U.S. Federal Reserve building in Washington, DC, U.S. on October 12, 2016. REUTERS/Kevin Lamarque
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WASHINGTON: There isn't much doubt about what the Federal Reserve will do when its latest policy meeting ends Wednesday: It's all but certain to raise its benchmark interest rate – its first increase in a year. The real anticipation surrounds what Fed officials may or may not say about the pace of future rate hikes against the backdrop of Donald Trump's election.On this, economists and investors agree: The Fed will raise its key rate by a modest quarter-point to a range of 0.5 percent to 0.75 percent – a move that will likely lead to slightly higher rates on some consumer and business loans.How the Fed will devise its rate policies in light of Trump's policies isn't clear and might not be clear even after it issues a statement and Chair Janet Yellen holds a news conference Wednesday.Before Trump's victory, the consensus view was for two Fed rate increases next year.Three months ago, the collective forecast of Fed officials was for two rate increases in 2017 .Whether or not Trump's election influences the pace of rate increases, it could nevertheless have a major effect on the Fed itself.Recent presidents have been careful to respect the Fed's independence.
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