Analysts are not expecting the Federal Reserve to raise interest rates again when it meets next week, but they’ll be looking for clues that the powerful policy-making board will seek to stabilize Wall Street’s nauseating volatility.

The meeting that begins Tuesday will be the Fed’s first since it boosted its key short-term interest rate — the federal funds rate — by 25 basis points to 0.25 to 0.50 percent in December, ending a historic era of near-zero rates. However, interest rates still remain extremely low by historical standards.

That was expected to be the first of a series of incremental interest rate hikes in 2016. How quickly things change.

A tailspin in the stock market in the first weeks of the year threw a wrench into the Fed’s plans. Stocks plunged to a two-year low in February, oil tanked to less than $27 a barrel and investors fretted about slowing Chinese economic growth.

By early March, stocks rebounded smartly, allowing the Standard & Poor’s 500 index to rebound from a 10 percent loss to a deficit of less than 3 percent for the year. But early-year volatility underscored the fragility of financial markets.

“The Fed has communicated its concern about the recent global capital market events in its assessment of the health of our economy,” says Anna Rathbun, director of research for CBIZ Retirement Plan Services in Cleveland. “The sentiment has certainly turned for the better in the equity markets, but the recent downturn was severe and still very fresh.”

What can investors expect from the Fed? Expectations have been reduced to nearly zero for a rate hike this month. “I would say the odds are around 10 percent at most,” says Brad McMillan, chief investment officer for Commonwealth Financial Network. “With recent financial turmoil and inflation still low, the Fed has an incentive to wait and no real incentive to act now. This Fed has also shown a tendency to err on the side of caution. They will sit tight and wait for more data.”

The central bank aims to telegraph its moves so the markets are prepared for shifts in monetary policy. “A March rate rise would come as a substantial surprise and would most likely result in a negative market reaction. No one is expecting one, and the market hates surprises,” McMillan says.

How many interest rate hikes can investors expect this year? The jury is still out. Forecasts range from no more interest rate hikes in 2016 to as many as three.

“We expect no more than two Fed funds rate hikes in 2016. The market is pricing in at best only one rate hike for this year. If the Fed surprises the market by hiking more than expected, both equities and the economy are very likely to weaken or decline. This may also increase the odds of a recession occurring here in the U. S. and other developed countries,” says Dan Heckman, Kansas City-based national investment consultant at U.S. Bank Wealth Management.

What is the Fed looking at now? The central bank’s dual mandate requires it to aim for full employment and stable prices.

The employment side of the equation looks good. U.S. employers continue to hire with 242,000 new jobs created in February, while the overall unemployment rate held at 4.9 percent, the lowest level seen in the wake of the Great Recession. The labor market is strong and getting stronger, McMillan says. “Job creation continues at close to the highest level since the 1990s, the jobs created are good ones — full time and high wage — and even discouraged workers and the long-term jobless are moving back into the labor market. We are not in a boom yet, but you can see that we may well get there in the next year or so,” McMillan says.

While low prices may sound good, they also signal weak demand. The Fed currently has an inflation target at 2 percent. Inflation has been perking up lately, but it is still below the Fed’s target. The Fed’s preferred inflation gauge — the core personal consumption expenditure price index — rose 1.7 percent in the 12 months through January. Rising rents and medical costs are contributing to the higher inflation levels.

Many analysts expect higher levels of inflation later this year. Inflation is hitting a transition point where we will see much faster increases, McMillan says. “Wage growth [is] heating up, with housing continuing to appreciate. Multiple factors are now moving up rather than down,” McMillan says.

When could the Fed hike next? While a March hike appears to be off the table, don’t rule out the possibility of a rate increase in June. “The Fed’s two fundamental mandates, employment and inflation, have been continuously improving despite the market downturn,” Rathbun says.

Historically, the early stages of rate rises have been positive for the markets, McMillan says. “Rate increases are a sign of an improving economy, and as such company sales and profits tend to rise and drive the market up. It is only in the later stages of rate increases that they become negative for the economy and the market. We are now in the positive zone. No guarantees, of course, but rate rises driven by a strengthening economy are not typically a bad thing,” McMillan says.

Higher interest rates should generally benefit the financial services industry, while stronger economic growth supports consumer discretionary and housing, McMillan says. “Widening economic growth should give consumer staples a boost,” he says.

Heckman sees opportunities for stock investors in the technology, consumer discretionary, and health care sectors. “Economic pessimism has unduly hit those sectors the hardest. We also believe that industrial stocks will at some point turn around as global commodity economies bottom due to a pickup in demand from major commodity buyers such as China,” Heckman says.

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What to Expect Now From the Federal Reserve originally appeared on usnews.com