The Federal Reserve's (search) interest-rate panel began a two-day meeting Wednesday, which economists expect will culminate on Thursday with a ninth straight quarter-point increase in short-term rates as the Fed seeks to keep inflation in check.

The Federal Open Market Committee's (search) two-day meeting began at about 2:00 p.m. EDT, a Fed official said. A decision on interest rates is expected Thursday shortly after 2:15 p.m. EDT.

With another rate increase a near certainty, analysts will watch to see if the central bank will hint at future policy shifts through its post-meeting statement. Any chanedictions that it can continue to move at a "measured" pace will be seen as signaling a change in tactics.

Most economists do not anticipate big alterations to the carefully couched statement although they are united in their expectations for a rate hike, according to a Reuters poll of major Wall Street dealers.

Economists said policy-makers also were likely to use their extended meeting to ponder the puzzle of ultra-low long-term interest rates, which have helped stoke U.S. housing, and to consider what happens if and when the property market cools.

The Fed's policy-setting committee holds eight meetings a year, two of which are two days long to allow officials to prepare for Fed Chairman Alan Greenspan's (search) twice-annual economic testimony before Congress. The Fed chief is expected to return to Capitol Hill sometime in July to update the forecasts he presented to lawmakers in February.

The federal funds rate -- the overnight rate at which banks lend to other banks -- is supposed to influence borrowing costs throughout the economy.

But this relationship has come unstuck in the current cycle with long-term bond yields, which move in the opposite direction from prices, now lower than when the Fed began raising the benchmark rate from 1 percent 12 months ago.

This poses a what Greenspan has termed a conundrum and could carry major risks to economic growth.

One theory for why bond yields are so low is that growth is softening and the Fed is ready to halt its tightening although Greenspan has said this does not explain the full scale of the discrepancy.

Officials go into the meeting armed with new figures showing the U.S. economy grew at a 3.8 percent rate in the first quarter, faster than initially thought, helped by feverish home building and stronger exports.

The GDP report showed prices remained well-behaved. A gauge favored by Greenspan -- the personal consumption expenditures price index, minus food and energy -- advanced at a 2 percent annual rate instead of 2.2 percent reported a month ago.