WASHINGTON — The Federal Reserve is all but sure to leave interest rates unchanged this week, though steady economic growth and inflation pressures will likely keep the Fed on a path toward further rate hikes later this year.

The central bank is meeting as its board is undergoing a makeover, with a raft of new appointees by President Trump who appear generally supportive of the Fed’s cautious approach to rates since the Great Recession ended.

Despite Trump’s complaints during the presidential race that the Fed was aiding Democrats in keeping rates ultra-low under President Obama, his choices for a chairman and for other slots on the Fed’s board have been moderates rather than hard-core conservatives who would favor a faster tightening of credit.

The Fed does seem inclined to continue raising rates modestly this year to reflect a steadily improving economy and to keep inflation pressures under control. Economic growth remains solid, and most inflation gauges show annual price increases finally moving close to the Fed’s 2 percent target level. But few analysts expect any aggressive pickup in the pace of rate hikes. Most foresee either two or three additional increases in the Fed’s benchmark rate by year’s end, coming after an earlier hike in January.

As Jerome Powell, Trump’s hand-picked new Fed chairman, said at a news conference after the central bank’s most recent meeting in March, “We’re trying to take the middle ground, and the committee continues to believe that the middle ground consists of further gradual increases in the federal-funds rate.”

Bond investors are signaling that they expect a pickup in U.S. inflation, having bid up the yield on the 10-year Treasury note last week above 3 percent before the yield settled just below that by week’s end. A year ago, the 10-year yield was just 2.3 percent.

Under Powell’s predecessors, the Fed’s board endured criticism from House Republicans over its decision to pursue a bond purchase program designed to lower long-term borrowing rates and to leave its key rate at a record low near zero for seven years. But so far, Trump’s reshaping of the Fed’s board reflects a generally status quo approach.


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