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.

When is the Fed meeting?

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.

What is the Fed likely to do on interest rates?

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. Diesel prices hit a record high of $6.27 a gallon on Tuesday, while gasoline has jumped 18 cents a gallon over the last week, and reached $4.33 on Tuesday, according to AAA.

"The debate has shifted from 'if' to 'how much' tightening this cycle will require to restore price stability," Seema Shah, chief global strategist at Principal Asset Management, said in an email. "After five years of above-target inflation, ongoing trade disruptions, $100+ per barrel oil prices and rising inflationary pressures from the AI capex buildout, a one-and-done hiking approach is unlikely."

It's still possible the Iran war could conclude quickly, which would ease energy prices and bypass additional rate hikes, Zureick said. Because of that uncertainty, predicting the path of inflation — and the Fed's response — is difficult, he added.

What would a rate hike mean for borrowers?

Banks are likely to raise their interest rates on credit cards and other lending products, although a single 0.25 percentage-point increase might not significantly raise borrowing costs.

"Cardholders should expect their credit card's APR to rise a quarter-point in the next couple of months following the Fed's move," Matt Schulz, the chief consumer finance analyst at LendingTree, told CBS News. "Unfortunately, the higher rate will apply to current balances as well as future purchases."

A rate increase this week would add only "a dollar or two" to the monthly bills of people carrying credit card balances, he said. But "if you're already struggling with card debt, any increase is unwelcome," Schulz said.

By contrast, a rate hike might hold down longer-term interest rates that consumers pay for things like mortgages. That's because mortgage rates tend to track the 10-year Treasury bill, whose yields have surged in recent weeks as investors question the Fed's commitment to lowering inflation. When inflation is elevated, investors typically demand higher yields in exchange for owning longer-duration bonds.

What would a Fed rate hike mean for savers?

Although rising interest rates boost borrowing costs, they also mean juicier returns for savers.

"It means better returns on high-yield savings accounts and CDs," Schulz told CBS News. "Returns aren't at the record levels we saw a couple of years ago, but they're still strong by historical standards, and a rate hike means they're only going to get better in the near future."

What would a rate hike mean for investors?

Fed rate movements can cause volatility in financial markets. For example, when the Fed began ratcheting up interest rates in 2022 as the economy was rebounding from the pandemic, the S&P 500 fell 18%.

At the time, however, investors were caught off guard by the Fed's aggressive response, while the market today has already priced in a series of hikes, Zureick said.

"It would have to be something orders of magnitude more than what the market's expecting, which at this point we think is fairly unlikely," he said.

Zureick advises investors to focus on diversification to ensure their portfolios can weather various challenges.

"Have a well-diversified portfolio that can withstand different environments, including international stocks, small and mid-cap stocks," he said. "As interest rates have risen, that's made bond portfolios more and more attractive as well."

And don't try to time the market, he added. "Steady is always good advice," he said. "Don't necessarily react to short-term news."