Fed Sees Inflation as Bigger Threat Than a Slowdown

The Federal Reserve appears to be more concerned about the first quarter's jump in inflation to 2.2 percent than about the U.S. Commerce Department's recent report that the economy expanded at a rate of only 3.1 percent—its lowest level since 2003—during the same period.

The central bank is poised to hike the federal-funds rate next week for the eighth time since last year, boosting it to 3 percent from 2.75 percent, with the biggest debate centering on the post-meeting statements it issues.

There are concerns that continuing to state that the Federal Reserve will drive up the short-term rate at a "measured" pace indicates that it is abiding by an already-established policy, prompting investors to sink their money into riskier investments.

Meanwhile, there are worries that removing the language would lead investors to act on the belief that the central bank is shifting its policy to half-percentage-point hikes from quarter-point increases.