The Federal Reserve is expected to give a nod to signs the U.S. recession is waning but will likely warn that recovery will be slow and dampen any hopes it will soon begin raising interest rates, Reuters reported Wednesday.

The Fed's policy-setting committee, which meets on Tuesday and Wednesday, is expected to hold its benchmark overnight rate in a range of zero to 0.25 percent, according to Reuters. A statement on the decision is due about 2:15 p.m. EDT on Wednesday.

"The markets have begun pricing in a near-term increase in interest rates. That is extremely unlikely. The Fed is going to want to discourage that," former Fed Governor Lyle Gramley told Reuters.

The Fed is likely to decide to let its $300 billion Treasury purchase program expire, as scheduled, in September. Fourteen out of 16 primary dealers polled by Reuters last week said they expect the Fed not to extend the controversial program.

Click here for the full Reuters report.