Follow live updates like Federal Reserve officials announced their latest interest rate decision.

Federal Reserve officials will announce their June policy decision on Wednesday and are widely expected to hold steady after 10 straight interest rate hikes — taking a breather to see how the economy shapes up 15 months into their fight against runaway inflation.

Prices have been rising faster than the Fed would have liked for more than two years, but Tuesday’s report confirmed that the pace of headline inflation continues to cool. That doesn’t mean the Fed can declare victory: Once volatile food and fuel prices were stripped out, the data showed inflation remained stubbornly high.

Investors are betting that Fed officials will respond to the mixed picture by skipping a hike this month, even as they signal they could raise rates in July.

Still, the outlook is very uncertain, and investors will be watching Wednesday’s Fed meeting closely for any indication of what might come next. Central bankers will release their rate decisions and fresh economic forecasts at 2:00 p.m., followed by a press conference with Fed Chairman Jerome H. Powell at 2:30 p.m. Here’s what you should know about the decision.

Interest rates are the highest since 2007.

Fed officials have raised interest rates sharply from March 2022, pushing them just above 5 percent in the fastest rate hike since the 1980s.

The speed of adjustment is important because it takes months or even years for the effects of interest rate changes to be fully reflected in the economy.

Given that, the economy is — most likely — only feeling some of the brunt of the Fed’s past moves. That raises the risk that the central bank could overdo it and slow growth by more than is absolutely necessary to curb inflation if officials push ahead without taking time to assess conditions.

Overshooting would have serious consequences: tightening the economy too aggressively would very likely cost jobs, reducing financial security for many Americans.

However, an incomplete policy response would also have consequences. If rapid inflation drags on for years, consumers could see rapid price increases as the norm, making them difficult to suppress without severe economic pain, causing higher unemployment.

Skipping doesn’t mean stopping.

If setting monetary policy is like a marathon, the pause now is like stopping for a water break—to stretch and take stock—rather than giving up running altogether. Fed officials have been clear that while they can temporarily pause, they can raise rates again if necessary.

“The decision to keep our key interest rate constant at the upcoming meeting should not be interpreted to mean that we have reached the maximum rate for this cycle,” said Philip Jefferson, the Fed governor who was chosen by President Biden to be the central bank’s next vice chairman. , said in speech last month. Instead, Mr. Jefferson said, the skip would “allow the committee to see more data.”

Tuesday’s inflation data likely kept officials on track to keep policy steady in June while raising July’s hike, said Sarah Watt House, chief economist at Wells Fargo.

“They’re going to have to walk a very fine line,” she said. “The US economy continues to carry some pretty impressive momentum.”

Investors are on alert.

Every three months, the Fed releases a set of projections — a “dot chart” — that shows where each official expects interest rates to land by the end of the next few years. (Predictions are anonymous and bordered by small blue dots, hence the name.)

The dots appear next to a set of unemployment, inflation and growth projections. They will be released on Wednesday for the first time since March.

Some economists expect the Fed to see slightly higher economic growth, slightly higher core inflation and a slightly lower unemployment rate by the end of 2023. One complication is that officials will barely have time to update their projections. after Tuesday’s consumer price index report. Officials had until Tuesday evening to change their predictions, but that meant they only had hours to count the new numbers.

Investors are likely to be most focused on how much higher interest rates are expected to go this year. Many expect Fed officials to move ahead with the next rate move — raising the expected interest rate to a range of 5.25 percent to 5.5 percent at the end of 2023. But with differing views on the central bank’s policy-making committee, forecasts could be further off higher rates.

All eyes are on Jerome Powell.

Fed Chairman Jerome H. Powell will hold a press conference after the meeting. It can explain how central bankers are thinking about their future path to interest rates — and how officials will assess whether they have done enough to be confident that inflation, now at 4.4 percent. preferred measureis back on track to the 2 percent target.

“The main message will be: A pause does not necessarily mean the end of the rate hike cycle,” said Michael Feroli, chief U.S. economist at JP Morgan.