The U.S. Federal Reserve is set to have its policy decision meeting this week. The central bank is quite likely to raise its rates again. Also, if the May consumer price report does not disappoint, the Fed is expected to continue to hint of a total of three rate hikes in 2017 and the beginning of the balance sheet adjustment before the end of 2017.

According to a Nordea Bank research report, the Fed is expected to hike its fed funds rate by 25 basis points on Wednesday to a range of 1 percent to 1.25 percent. Recent Fedspeak has clearly downplayed the subdued first quarter for the U.S. growth and weak inflation prints as temporary and implied that the Fed would continue with its policy plan for the rest of 2017 as full employment has been achieved.

The FOMC’s median projections of the fed funds rate at the end of this year and the next are not expected to change, in line with three rate hikes both in 2017 and 2018, consistent with the recent projection from March. The Committee’s neutral rate estimate is also likely to stay the same at 3 percent.

The U.S. Fed is expected to give further details about how it intends to shrink its balance sheet. However, it is unlikely to hint that the balance sheet adjustment is imminent, noted Nordea Bank.

“Our baseline remains that the Fed’s balance sheet adjustment will start in December, with a gradual and predictable tapering of the bank’s reinvestments of maturing securities”, added Nordea Bank.

Meanwhile, the U.S. Fed is unlikely to make any major changes to the economic outlook. While headline and core inflation expectations for this year are expected to see minor downward revisions, the jobless forecast is also set to be downwardly revised. The GDP growth projection is likely to stay the same.