WASHINGTON: The US Federal Reserve is widely expected to finally push interest rates up after seven years at the zero level when it opens a two-day policy meeting on Tuesday.
The break, well-flagged by Fed officials including Chair Janet Yellen, would signify leaving behind the extraordinary crisis stance in monetary policy that aimed to restore the US economy's strength after the financial crisis and deep recession of 2008-2009.
While an increase in the federal funds rate -- which has not been moved higher in almost a decade -- is not certain, Yellen strongly pointed to it at the beginning of December.
Since then, economic data, including job creation and consumer spending, have been strong enough to keep her from changing her view.
The Fed's policy body, the Federal Open Market Committee, will weigh over Tuesday and Wednesday whether the US economy is sufficiently strong to weather increasing the fed funds rate from 0-0.25 percent to an expected 0.25-0.50 percent.
The benchmark rate is a short-term peg for interbank lending which influences rates throughout the financial system.
Most importantly, expectations about its future level determine long-term interest rates on car and home loans, financing for businesses and foreign governments, and savers' deposits.
The prospect of the launch of a campaign to raise the rate and tighten US monetary policy after years of cheap dollars has already stirred turmoil in the global financial system, hurting especially emerging-market economies with significant dollar exposure and weakening currencies.
It will come as leading central banks elsewhere, including China, Japan and the eurozone, are easing monetary policy to boost growth.
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