Washington CNN  —  The Federal Reserve is expected to announce Wednesday that it is keeping interest rates at a quarter-century high for the sixth-straight meeting. Officials are not yet convinced that inflation is under control, which is a requirement for them to lower borrowing costs. Investors will be paying close attention to how “hawkish” — or concerned about inflation — Fed Chair Jerome Powell sounds when he address reporters in his 2:30 pm ET press conference and whether or not he now sees the possibility of another rate hike. In his latest comments, the Fed chief asserted that there has been a “lack of further progress” on inflation, which was a pivot from prior comments he made that hotter-than-expected inflation readings might have been due to “seasonal fluctuations.” Powell has consistently said that the first interest rate cut in this cycle is likely this year, so Wall Street is watching to see if Powell maintains that view. Other Fed officials have already introduced the possibility of a rate hike, in addition to the chance of no rate cuts this year. After the Consumer Price Index for March came in hot, New York Fed President John Williams, who has a permanent vote on all interest rate decisions, told Bloomberg in an interview that “monetary policy is in a good place” and that he still expects the first rate cut sometime this year. Williams later said that another rate hike is possible if economic data warrants it. Minneapolis Fed President Neel Kashkari said a few weeks ago that there is a possibility the Fed may not end up cutting rates at all this year. There has clearly been a hawkish shift among Fed officials — and even one of the Fed’s most dovish policymakers is sounding concerned. “So far in 2024, that progress on inflation has stalled,” Chicago Fed President Austan Goolsbee said earlier this month during an event in Chicago. “You never want to make too much of any one month’s data, especially inflation, which is a noisy series, but after three months of this, it can’t be dismissed.” What went wrong in the first quarter? Inflation seems to be stuck above the Fed’s 2% goal after it tumbled throughout 2023. That has thrown Wall Street into a tailspin. And to add insult to injury, economic growth in the first quarter slowed more sharply than expected, further complicating the Fed’s assessment of the US economy’s health and direction. SAN RAFAEL, CALIFORNIA - MARCH 12: A customer shops for food at a grocery store on March 12, 2024 in San Rafael, California. According to a report by the Bureau of Labor and Statistics, inflation rose by 3.2 percent for the 12 months ended in February, up slightly from January’s annual reading of 3.1 percent. (Photo by Justin Sullivan/Getty Images) Justin Sullivan/Getty Images Related article US economy grew by just 1.6% in the first quarter, a much slower pace than expected The Fed’s preferred inflation gauge, the Personal Consumption Expenditures price index, accelerated in March to an annual rate of 2.7%, according to Commerce Department data, up from February’s 2.5% and above what economists forecast. CPI has similarly reflected persistent price pressures in recent months. March was the third-straight month that inflation readings came in hotter than expected. Consumer prices are not retreating because of stubbornly elevated costs in housing, insurance and the broader services sector. An uptick in gas prices over the past several weeks has also put some upward pressure on inflation overall, though experts say gas prices may have already reached a peak this year. Data on employers’ labor costs released Tuesday showed that Americans’ pay gains accelerated much faster than expected during the first three months of the year, showing that some underlying inflation pressures persist. Still, economists are waiting on declining rents to filter through to government inflation data. Wall Street is also contending with another worry. Conventional wisdom has it that a slowing economy should also slow inflation, but that wasn’t reflected in the initial estimate of first-quarter gross domestic product released last week. US GDP, a measure of all the goods and services produced in the economy, when adjusted for seasonality and inflation, came in at a 1.6% annualized rate for the first quarter, down sharply from the fourth quarter’s 3.4% rate. Unsurprisingly, the GDP report also showed that inflation accelerated in the first three months of the year. That combination eerily resembled stagflation, which triggered a broad stocks selloff on Wall Street Thursday. The threshold for a rate hike is ‘extremely high’ Another interest rate hike is back in the conversation, but at the moment, it’s still not likely the Fed will do that. New York Fed chief Williams said recently that interest rates are “in a good place.” This aerial picture shows homes near the Chesapeake Bay in Centreville, Maryland, in March 2024. Jim Watson/AFP/Getty Images Related article Europe is beating inflation. Why can’t America declare victory? And most investors also aren’t betting on any rate hikes, according to the futures market and forecasts from analysts at major Wall Street banks. JPMorgan and Goldman Sachs expect the first cut in July, while Wells Fargo and Bank of America are betting on the first cut later in the year. Wall Street’s best bet on the first cut is November, according to futures, and not by a lot. There is currently a roughly 43% chance of the Fed cutting rates in November versus a 38.5% chance of another pause, the CME FedWatch Tool shows. “The bar for another rate hikes is extremely high and the only way I would see that happen is if we got several months of much stronger economic numbers that pointed to a reacceleration,” Oren Klachkin, financial market economist at Nationwide, told CNN.