WASHINGTON — Federal Reserve officials are meeting this week for the first time under their new chairman, Jerome Powell, whose news conference to follow is stirring high anticipation.

The Fed is set to announce its first interest rate increase of the year, a testament to the continued strength of the economy and of the job market in particular. The central bank raised rates modestly three times in 2017 under Powell's predecessor, Janet Yellen, whom he succeeded last month. Over time, a rise in the Fed's benchmark rate tends to cause many consumer and business loan rates, including mortgages, to rise as well.

Once its meeting ends at 2 p.m. Eastern time Wednesday, the Fed will issue a policy statement and update its economic projections before Powell begins taking questions from reporters.

Here's what to watch for:

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FED STATEMENT

The Fed's policy statement will likely announce its latest rate hike — its sixth since December 2015 and the first since December of last year. The CME Group, which tracks investor expectations of Fed actions, puts the likelihood of a rate hike at 94 percent.

For seven years beginning in late 2008, the Fed had kept its benchmark rate at a record low near zero. The idea was to help encourage borrowing and spending and nurture the economy's recovery from the financial crisis and the Great Recession.

But for more than two years now, it has been gradually raising its key rate to bring it closer to historically normal levels. Yet the pace of credit tightening has been so gradual that even after five rate hikes, the Fed's benchmark rate remains in a still-low range of 1.25 percent to 1.5 percent.

Wednesday's statement will also provide the Fed's latest descriptive assessment of the economy. This is likely to sketch a comparatively sunny view, akin to what the central bank's previous statement had said in January: That the job market "has continued to strengthen and that economic activity has been rising at a solid rate," with consumer spending and business investment also "solid."

Also expected to remain in the Fed's statement is the observation that it foresees "further gradual increases" in short-term rates.

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OUTLOOK AND DOTS

The Fed updates its economic forecasts four times each year. This week's updates, its first since December, could predict faster growth, lower unemployment and a pickup in inflation, which has remained below the Fed's 2 percent target level for the past six years.

One reason the Fed may upgrade its economic predictions from December: Its previous forecast was devised before Congress approved a $1.5 trillion tax cut that President Donald Trump pushed through Congress in late December. The benefits of the tax cuts could help quicken economic growth. So might the addition of $300 billion in government spending over the next two years — the result of a budget agreement Congress approved last month.

The Fed's economic forecast is the median view of the cumulative predictions of its board members and the Fed's 12 regional bank presidents. A more robust outlook could support the view that the Fed is moving toward an acceleration in its rate increases.

The outlook will include a new "dot plot," the collection of views of all Fed officials on the appropriate pace for future rate hikes. The December outlook showed the median view was for three increases in 2018. But some economists are beginning to suggest that there could be four rate hikes this year based on the strength of the economy and increased government stimulus.

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POWELL SPEAKS

By fielding questions from reporters after the meeting, Powell will be following a tradition begun by Ben Bernanke and continued by Yellen, for the Fed's leader to hold a news conference four times a year. The news conferences, which last about an hour, are dissected by global investors for any clues to the Fed's thinking that might go beyond the typically bland language in its policy statement.

Powell, a Fed board member since 2012, earned solid reviews for his handling of two days of questions before Congress when he delivered the Fed's semiannual monetary report last month. On Wednesday, analysts expect the new chairman to strike a cautious but positive tone — and perhaps to reiterate the view he expressed to Congress last month that his "personal outlook for the economy has strengthened since December."

Such a message, articulated for a second time, would lead many investors to anticipate an acceleration of rate increases, though Powell will surely try to avoid sending any implicit signals of Fed moves yet to come.

"Chairman Powell will sound bullish on the economy, without raising concerns about a more aggressive path for rate hikes," predicted Diane Swonk, chief economist at Grant Thornton.

Of course, there is always the possibility of a misstep. A news conference can be a treacherous occasion for a Fed leader not practiced in the imperative of measuring every word. Yellen, at her first news conference in 2014, rattled markets with a reply that sparked concerns that the Fed might be ready to start raising rates sooner than investors had been expecting.

She didn't make that mistake again.