Fed faces crucial interest rate decisions, and any missteps could tip economy into recession

After keeping interest rates near zero since early in the pandemic to heal the economy and bolster the job market, the Federal Reserve has transformed suddenly into an inflation-fighting machine.

The Fed on Wednesday is expected to signal that it likely will raise its key rate from just above zero in March, its first bump in more than three years. The move would kick off what will likely be a series of at least three hikes this year, and possibly as many as seven, at least according to one research firm.  

With growth and inflation already set to slow this year, the central bank’s newly aggressive stance is raising concerns that it could move too abruptly and tip the economy into another recession. Already, the Fed's anticipated moves have spooked investors and played a big role in the stock market's selloff this month.

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