US Federal Reserve Interest Rate Decision Today: All eyes on Jerome Powell's commentary

According to CME Group data cited by CNBC International, markets are pricing in just a percent chance of what would be the 12th hike since March 2022.

Following this week’s meeting, the Fed will also release its quarterly update on what it expects for several key indicators including interest rates, gross domestic product, inflation and unemployment.

An AP report has said that the updated projections are likely to show that policymakers expect to raise the benchmark rate once more this year. The rate now stands at roughly 5.4 percent, its highest point in 22 years.

“Those projections will likely also show that the Fed envisions fewer interest rate cuts next year than it did in June, when it projected three rate reductions in 2024,” the report added.

Though the central bank is winding down its rate hikes, Powell and other Fed officials have said the key rate could remain at its peak well into next year. Analysts cited by AP expect the Fed's forecasts this evening to show just one or two rate cuts in 2024.

Meanwhile, Gus Faucher, chief economist at PNC Financial Services Group told CNBC, “I think that they will keep that bias towards higher rates in there and indicate that they are willing to raise the funds rate further if the data start to show that either inflation is not slowing as they expect it to, or if the labor market remains too tight.”

As the Fed looks to moderate borrowing and spending, slow the economy and tame inflation, Powell and other central bank officials have previously said they are making progress but aren't yet done.

Consumer inflation, measured year over year, has tumbled from a peak of 9.1 percent in June of last year to 3.7 percent in August. Yet it's still well above the Fed's target.

It must be noted that inflation in June and July, excluding volatile food and energy prices, posted its two lowest monthly readings in nearly two years.

However, even as overall inflation has declined, the cost of many services — from auto insurance and car repairs to veterinary services and hair salons — are still climbing faster than they were before the pandemic.

The structure of Fed’s statement will also be keenly watched. For instance, if the Fed were to remove the word “highly” from “The Committee remains highly attentive to inflation risks,” it could indicate the Fed is growing less concerned about inflation.

One potential adjustment from the July statement could be in the sentence,

“In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

Also, if the US central bank removes the word “additional” from the sentence “In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy,” it would send a signal that members of the Federal Open Market Committee are at least considering that no more rate hikes will be needed, Ellen Zentner, chief US economist at Morgan Stanley told CNBC.