(Reuters) – U.S. central bankers have unambiguously telegraphed this week’s policy decision: a quarter-of-a-percentage-point increase in their benchmark interest rate, the smallest since they kicked off their tightening cycle 10 months ago with one the same size.

Less clear is whether they will continue to signal “ongoing increases” ahead for the policy rate as evidence mounts that inflation and the economy are both losing momenta.

The Federal Reserve has included that phrase in every policy statement since March 2022, when officials had just started raising borrowing costs from near zero and wanted to signal there was a lot more tightening ahead.

The rate increase expected at the Federal Open Market Committee’s Jan. 31-Feb. 1 meeting would bring the policy rate to the 4.5%-4.75% range. That’s two quarter-point rate hikes short of the level most Fed policymakers in December thought would be “sufficiently restrictive” to bring inflation under control.

“Does the word ‘ongoing’ really capture just two more hikes? It’s a close call,” said III Capital Management’s Karim Basta.

At the same time, he said, “there’s going to be some caution” about doing anything that could feed market expectations that a pause in rate hikes is imminent.

That’s exactly what financial markets are already pricing in. An end to rate hikes in March, with the policy target in the 4.75%-5% range, followed by rate cuts starting in September in the face of what many economists forecast will be easing inflation and a recession. Fed policymakers, as of December at least, all see no rate cuts until 2024.

“Any signal to the market that they are near to being done is just giving markets a green light that the next move is a rate cut,” said ING Chief International Economist James Knightley.

That could ease the financial conditions the Fed has fought hard to make more stringent and potentially kindle more inflation, he said, undermining its efforts to tame it.

“Why rock the boat? Why risk unsettling the situation?” Knightley said. “The key question is how committed they are to further rate hikes.”

HONORABLE DISCHARGE

There is little question the Fed’s most intense tightening – highlighted by a run of four straight 75-basis-point hikes to deal as swiftly as possible with inflation hitting 40-year highs – is giving way to something more gradual. But there is still a lot of uncertainty over how much more tightening is needed.

Inflation is coming off the boil. The core personal consumption expenditures price index, which the Fed uses to gauge underlying inflation momentum, rose 4.4% in December from a year earlier; for the most recent three months, it averaged 3.2% on an annualized basis. Still, that’s well above the Fed’s 2% target.

The Fed’s aggressive response also appears to have registered with U.S. consumers, who as recently as last summer had begun to view higher inflation as a more lasting phenomenon, a worrying development that had been among the catalysts for the rapid ramp-up to those outsized rates hikes. Data on Friday from the University of Michigan showed consumers’ near-term inflation views have fallen to the lowest since April 2021 and longer-term price growth expectations have receded from last year’s decade highs.

The economy is starting to slow but the unemployment rate at 3.5% hasn’t been lower in more than 50 years. Wage growth is much stronger than Fed officials feel is consistent with stable prices.

Historically, Fed policymakers often signal an increase in uncertainty and potential turning points with subtle changes in policy statement language designed to sketch out the likeliest path forward without locking them in.

In late 2005, for instance, after more than a year of steady interest-rate increases, policymakers wanted to “honorably discharge” some words from long service in their post-meeting statement, transcripts show, including flagging the likelihood of “measured” rate hikes to remove “accommodation.”

By January they settled on “further policy firming may be needed,” a phrase Fed Chair Alan Greenspan told fellow policymakers reflected the fact that the Fed no longer had a set plan but would instead be “largely” guided by incoming data.

In late 2018, Fed policymakers similarly wanted to show increased data dependency and relatively limited additional tightening. The tweak to their December statement to say the committee “judges that some” rather than “expects” that “further gradual increases” in the target rate would be consistent with its goals turned out to mark the end of that round of rate hikes.

Whether either of those changes serves as a blueprint for next week is unclear. Fed policymakers in recent public comments have offered up their own descriptions of the rate hike path, including “continued tightening of monetary policy” from the often-influential Fed Governor Christopher Waller.

Fed Vice Chair Lael Brainard and New York Fed President John Williams, who both work closely with Fed Chair Jerome Powell to craft official verbiage, for their parts offered no new rate-hike guidance in recent speeches, though both Brainard and Williams stressed the Fed must “stay the course” on its inflation fight – a turn of phrase Powell has also often used.

And analysts are divided on whether the Fed plans to retire “ongoing” in favor of something that sounds less like policy is on autopilot and but is still headed higher, as BNP analysts suggested this week.

“It’s a very delicate problem. It’s a delicate language issue, but I think they’d be best not to change it,” says Nationwide Chief Economist Kathy Bostjancic, taking the other side. “They don’t want financial conditions to become markedly easier than they are currently.”