The Federal Reserve is expected to raise interest rates on Wednesday by 0.75%, the largest bump at a single meeting since 1994.

In the face of higher-than-expected inflation and deteriorating consumer sentiment, the Fed looks likely to scrap its previously-communicated plans for a 0.50% move this week. As of Wednesday morning, Fed funds futures markets were pricing in a 96% chance of a 0.75% hike (with a 4% chance of a 1.00% hike).

The decision to pivot — last minute — to a more aggressive rate hike underscores the central bank's concern that inflation is worse than policymakers had anticipated.

The move means that borrowing costs for American families and households could rise by more than originally expected, which the Fed hopes will dampen the demand that is behind some of the price increases.

Alongside the Fed policy statement, the central bank is due to release a "dot plot" chart illustrating various Fed policymakers' expectations for future rate hikes. Those projections will also include forecasts on future inflation and unemployment.

The Fed will release both documents at 2 p.m. ET, followed by Fed Chairman Jerome Powell's press conference at 2:30 p.m. ET.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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