At the last meeting before Trump took office, the Fed expected a rate cut

Policymakers and investors will be closely watching the Federal Reserve’s announcement Wednesday about setting the level of its benchmark interest rate, which helps determine loan payments on everything from credit cards to mortgages.

The upcoming move represents the final interest rate decision before the inauguration of President-elect Donald Trump, who repeatedly criticized Fed Chairman Jerome Powell during Trump’s first term.

Investors believe a quarter-percentage point rate cut on Wednesday is all but certain, according to the CME FedWatch Tool, a gauge of market sentiment.

A rate cut of that size would match the move the Fed took last month and would be equivalent to a percentage point cut made in just a few months since the central bank decided to scale back its fight against inflation in the fall .

However, Wednesday’s widely expected rate cut could be the Fed’s last for many months, experts previously told ABC News.

A recent bout of stubborn inflation could prompt central bankers to freeze prevailing interest rates to control rising prices. Meanwhile, a booming economy shows little need for the economic boost that lower borrowing costs could bring, the experts said.

Consumer prices rose 2.7% in November from a year earlier, marking two straight months of accelerating inflation, government data showed last week.

Inflation has slowed dramatically since peaking at more than 9% in June 2022. However, the recent rise has reversed some progress made earlier this year that had resulted in price increases close to the Fed’s 2% target.

In August, Trump said the president should play a role in setting interest rates. The proposal would represent a major departure from the Fed’s longstanding norm of political independence.

Powell struck a defiant tone last month when asked whether he would resign from office if Trump asked him to.

“No,” Powell told reporters gathered at a news conference in Washington, D.C., just blocks from the White House.

Asked whether Trump could fire or demote him, Powell replied: “Not allowed under the law.”