Fed expected to open door to rate hike if economy improves

FILE - In this March 18, 2015 file photo, Federal Reserve Chair Janet Yellen participates in a news conference at the end of the Federal Open Market Committee meeting in Washington. With evidence that the U.S. economy is rebounding from a winter slump, the Federal Reserve will likely signal Wednesday, June 17, 2015, that an interest rate increase is coming _ just not quite yet. (AP Photo/Kevin Wolf, File) FILE - In this March 18, 2015 file photo, Federal Reserve Chair Janet Yellen participates in a news conference at the end of the Federal Open Market Committee meeting in Washington. With evidence that the U.S. economy is rebounding from a winter slump, the Federal Reserve will likely signal Wednesday, June 17, 2015, that an interest rate increase is coming _ just not quite yet. (AP Photo/Kevin Wolf, File)

By Associated Press June 17, 2015 4 min read

WASHINGTON (AP) – The Federal Reserve is expected to signal Wednesday that it’s getting closer to raising interest rates for the first time in nearly a decade while leaving the timing of that increase uncertain.

Many economists foresee the first rate increase in September if the economy keeps improving between now and then.

“All the pieces are falling in place for a September rate hike,” said Mark Zandi, chief economist at Moody’s Economics. “It is just a question of getting markets prepared.”

The Fed has held its key short-term rate at a record low near zero since late 2008, and it hasn’t increased rates since 2006.

The Fed’s timetable has far-reaching impact: Once it begins raising short-term rates, other rates – for mortgages, auto loans, corporate borrowing – could head higher. Stock and bond prices could be squeezed.