Janet Yellen, chair of the U.S. Federal Reserve, arrives to a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., U.S., on Wednesday, Dec. 13, 2017. Andrew Harrer | Bloomberg | Getty Images

WASHINGTON — The Federal Reserve will release a monetary policy statement at 2 p.m. on Wednesday, after a two-day meeting of its Federal Open Market Committee, which sets monetary policy. ■ Investors expect the Fed to leave its benchmark interest rate unchanged, in a range between 1.25 percent and 1.5 percent. ■ The Fed's economic assessment may be upgraded to reflect the strength of recent data. That would strengthen investor expectations that the Fed will increase the benchmark rate at its next meeting, in late March. ■ This is the final meeting for the Fed's chairwoman, Janet L. Yellen. She will be replaced this weekend by Jerome H. Powell, a member of the Fed's board.

The Big Picture

The economy grew 2.3 percent in 2017, extending a prolonged period of unusually stable growth. And economic forecasters expect somewhat faster growth this year, partly as a result of the $1.5 trillion in tax cuts that went into effect at the beginning of the year. The unemployment rate stood at 4.1 percent in December, and Fed officials don't expect it to fall much further. Instead, as growth continues, they expect inflation to begin increasing more quickly. The Fed raised its benchmark rate three times last year, and officials plan to keep raising rates this year, although there isn't a consensus as to how many increases the markets should expect. But Fed officials are still committed to moving slowly. Growth, while steady, remains weak by historical standards, and while unemployment is quite low, wage growth remains sluggish, too. The Fed last raised rates at its final meeting of 2017, in December. Investors expect that the Fed will pause at this meeting, then resume increases in March.

Changing of the Guard

Ms. Yellen will step down on Saturday at the end of her four-year term as Fed chairwoman. Under her leadership, the Fed has reduced unemployment while inflation has remained sluggish. The Fed has also continued the process of imposing stronger regulations on the financial industry. Ms. Yellen is the first chair to complete a four-year term without being appointed to a second term. Mr. Powell, chosen by President Trump as her successor, has emphasized that he supports the Fed's current monetary policy of slowly unwinding its post-crisis economic stimulus campaign. Part of the membership of the Fed's policymaking committee also turns over each year. The policy committee comprises the Fed's governors and the presidents of its 12 regional banks, but only five of those bank presidents hold votes in any given year. The presidents who will hold votes in 2018 are regarded as somewhat more concerned about inflation than those who held votes last year. That could influence decisions about the pace of rate increases.

On the Horizon

Investors expect the Fed to raise its benchmark rate at its next meeting in March. While the Fed's post-meeting statement Wednesday is unlikely to address the issue directly, an optimistic economic assessment would fortify those expectations. Most Fed officials predicted in December that the Fed would raise rates at least three times in 2018. Some analysts already are raising the odds of a fourth increase, citing a strengthening economic outlook. There are countervailing pressures. Inflation remains low despite the Fed's repeated predictions that faster inflation is around the corner. The value of financial assets, on the other hand, continues to soar as investors have shaken off the rate increases, keeping borrowing costs low. So far, Fed officials have played down the importance of both factors, insisting that they are focused on raising rates slowly as the labor market tightens.

Coming Attractions