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Economists still expect that the U.S. Federal Reserve will raise its key interest rate this week. But they will be on the lookout for any suggestion that the central bank will slow the pace of hikes next year, given recent uneven economic signals, the volatile stock market and the fact that U.S. President Donald Trump is imploring the Fed to hold off.

“We think that members will end up voting for a rate hike,” economists at National Bank Financial said in a note. “That said, the tone of the statement should be noticeably more dovish; we suspect that the reference to ‘further gradual increases’ will be removed.”

The Fed has been raising its key rate since December 2015. Inflationary pressures, such as wage increases, have been picking up after years of ultra-low rates in the wake of the financial crisis. The U.S. economic expansion has produced strong employment growth and a near-50 year low unemployment rate of 3.7 per cent.

The Fed last raised its rate in September, in keeping with a quarterly pace. A quarter of a percentage point hike on Wednesday will take the federal funds rate target to a range between 2.25 per cent and 2.5 per cent, marking the eighth hike in three years and the fourth this year.

But the path forward is no longer clear, which is why Wednesday’s decision by the Fed is one of the most anticipated monetary policy decisions in recent years.

The stock market has turned tumultuous this year, reflecting concerns about corporate profitability in 2019. And a number of economists believe that economic activity is set to slow, as the stimulus from recent U.S. tax cuts wears off and companies feel the effects of trade tariffs and steeper borrowing costs.

The S&P 500 is down 4.4 per cent this year, putting the index on track to post its worst annual performance since 2008, when stocks were falling during the financial crisis. Commodities are also weak: Crude oil fell 7.4 per cent on Tuesday, touching its lowest level in 16 months.

While retail sales remain strong, new home sales have fallen and declining homebuilding stocks are reflecting deep pessimism in a sector that is particularly sensitive to shifting economic winds. What’s more, many observers believe that the flat yield curve – or relatively little difference between the yields on two-year and 10-year government bonds – is consistent with an economic slowdown.

“At a minimum, the flat shape is signalling a stall-speed economy next year,” David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates, said in a note.

Economists polled by Reuters last week say there is a 40 per cent chance of a recession within the next two years, up from 35 per cent in a prior poll.

Already, the economies of Germany and Japan have contracted, and confusion over Brexit has created uncertainties about the U.K. economy. In China, retail sales in November slowed to a 15-year low, and car sales slumped 14 per cent from last year.

In Canada, low oil prices are weighing on Alberta’s economy, potentially sidelining the Bank of Canada’s own rate hikes. The bank held its key rate unchanged at 1.75 per cent earlier this month, and an anticipated rate hike in January is now an open question.

“The world economy is still expanding at a rapid pace, but cracks are starting to appear in the global growth picture,” Brian Coulton, chief economist at Fitch Ratings, said in a note.

Even the pickup in U.S. inflation, which has underscored the pace in rate hikes, may be ebbing.

“The recent volatility in financial markets will not stop the Fed raising rates at its meeting. A bigger concern for the Fed is the renewed weakness in core inflation, which may prompt some officials to revise their interest rate projections lower,” Michael Pearce, senior U.S. economist at Capital Economics, said in a note.

Consumer prices in November were unchanged from the previous month, due partly to tumbling energy costs. The annual inflation rate subsided to 2.2 per cent, or its lowest level in 11 months. The core rate, which ignores volatile energy costs, rose slightly – also to 2.2 per cent – but perhaps not enough to bolster the case for aggressive rate hikes ahead.

“The Fed's final rate decision of 2018 is next Wednesday, and a quarter point rate hike is largely a done deal. However, looking ahead to next year, we expect only two more rate hikes will be required to keep inflation on target,” Leslie Preston, senior economist at Toronto-Dominion Bank, said in a note.

Some economists see the need for even fewer rate hikes in the year ahead, drawing even more attention to a monetary policy statement that is going to rivet observers worldwide.

“The Fed is still likely to pull the trigger on a rate hike in December after respectable data on employment, factory ISM and core retail sales. But we no longer see as big an overshoot risk for 2019," Avery Shenfeld, chief economist at CIBC World Markets, said in a note.

He added: "If, as we expect, growth isn’t much better than 2 per cent, the Fed will be limited to one final hike next year, one that it could end up reversing in 2020 as fiscal policy tightens.”