Fed rate hike expected on Wednesday. See what it means for your money.

Borrowing is likely to get more expensive for Americans, and soon, according to economists.

The Federal Reserve is expected to raise its benchmark interest rate on Wednesday for the first time in more than three years as the central bank battles stubborn inflation fueled by high energy prices. Some Wall Street forecasters also pencil in one or two additional rate hikes over the next several months.

Despite President Trump's repeated calls for lower interest rates, many economists predict that Fed officials will raise the federal funds rate by 0.25 percentage points at its Sept. 16 meeting. Inflation remains well above the central bank's 2% annual target, with the Consumer Price Index rising at an annual pace of 3.4% in August.

Interest rate hikes are the Fed's most potent tool for quashing inflation because businesses and consumers respond by pulling back on spending, cooling the economy and tempering price increases as demand slows.

With little U.S. progress toward ending the Iran war , some economists predict that high energy prices may stick around for months, which could push the Fed to further tighten monetary policy as it seeks to curb inflation.

"If everything stays the same and energy prices remain elevated and the economy remains pretty strong, there's good reason to expect maybe another hike or two beyond this week," Brandon Zureick, chief economist at wealth management firm Johnson Investment Counsel, told CBS News. "We're not expecting a repeat of 2022, when the Fed was really fighting inflation that was much, much higher."

Inflation reached a 40-year peak of 9.1% in June 2022, spurring the Fed into a series of 11 rate hikes that raised its benchmark rate from near zero to a range of 5.25% to 5.5% by July 2023. That was the last time the central bank raised borrowing costs, and since then the Fed has either cut or held rates steady.

The Federal Reserve will announce its decision at 2 p.m. ET on Sept. 16. The announcement will be followed by a press conference with Fed Chairman Kevin Warsh at 2:30 p.m.

The Federal Open Market Committee, the central bank's rate-setting panel, will also release its quarterly Summary of Economic Projections on Wednesday. The release includes FOMC officials' forecasts for inflation, GDP growth and other economic measures.

CME FedWatch, which forecasts the likelihood of rate hikes based on 30-day Fed funds futures prices, puts the probability of a 0.25 percentage-point rate hike on Wednesday at roughly 90%. That would increase the federal funds rate — what banks charge each other for short-term loans — to a target range of 3.75% to 4%.

The bigger question is whether a rate increase this week could be the first of a series of hikes as the Fed tries to rein in inflation, as some economists expect, given inflationary pressures from the Iran war.