The Federal Reserve Meets Wednesday. Here’s What to Watch.

Federal Reserve officials will conclude their two-day meeting on Wednesday, and they are widely expected to keep interest rates steady at a two-decade high when they release their policy decision at 2 p.m.

But investors are likely to closely watch the meeting — particularly Chair Jerome H. Powell’s 2:30 p.m. news conference — for hints of when policymakers might begin to lower interest rates. The Fed has held its policy rate in a range of 5.25 to 5.5 percent since July, and officials projected in December that they might lower borrowing costs by three-quarters of a percentage point over the course of 2024.

But both the timing and the magnitude of those rate cuts remain uncertain. On the one hand, inflation has come down more swiftly than many economists had expected in recent months. On the other, economic growth is proving stronger than anticipated, which could give companies the wherewithal to keep raising prices into the future.

Here’s what to know about this meeting.

The Fed’s statement could change.

The Fed’s post-meeting policy statement has suggested that officials will watch economic data “in determining the extent of any additional policy firming that may be appropriate.” Now that further rate increases are looking less and less likely, that language may be in for a tweak.

Powell has a delicate balancing act.

Fed officials do not want to keep interest rates so high for so long that they squeeze the economy too much and tip it into a recession. On the other hand, they do not want to cut rates too much too early, allowing the economy to accelerate and risking a renewed pickup in inflation. Mr. Powell could talk about how officials will try to strike that balance.

Growth vs. inflation will be critical.

A lot of what comes next will hinge on which numbers Mr. Powell and his colleagues decide to focus on — growth or inflation — and investors might get a hint at that this week. Growth and consumer spending are both faster than many economists had expected. But the Fed’s preferred inflation gauge is also below 3 percent for the first time since early 2021, even after stripping out food and fuel costs, which can fluctuate from month to month.