NEW YORK (AP) — The Latest on the Federal Reserve's monetary policy meeting (all times local):

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2:05 p.m.

Federal Reserve policymakers expect to hike rates just two times next year, down from a previous expectation of three, a sign the Fed foresees a more cautious approach in 2019. They also forecast one additional rate hike in 2020, the same as an earlier projection.

Fed policymakers also took a slightly less bullish view of the U.S. economy. They now project growth will slip to 2.3 percent next year, down from an earlier estimate of 2.5 percent. The Fed releases its economic projections every three months and last did so in September.

The Fed also sees the unemployment rate rising slightly more quickly, reaching 3.8 percent in 2021, up from 3.7 percent in September.

Fed officials also reduced their estimate for the long-run level of the interest rate they control, to 2.8 from 3.0. That is a sign they believe fewer hikes are needed to keep the economy in balance, with growth at a modest pace that doesn't spur inflation.

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2:00 p.m.

The Federal Reserve hiked a key short-term interest rate for the fourth time this year, a choice meant to temper inflation after months of steady and solid job growth.

Fed officials voted unanimously to increase the federal funds rate — which banks charge each other for loans — to a range of 2.25 percent to 2.5 percent.

A statement released by the Fed noted that labor market has continued to strengthen, while inflation has remained near the U.S. central bank's 2 percent target.

The Fed made a slight modification to its December statement from prior months, adding that it expects "some" further gradual increases in rates. The use of the term "some" suggests that Fed officials expect fewer rate hikes going forward.

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12:15 p.m.

U.S. stocks are climbing as investors wait for the Federal Reserve to conclude its last meeting of the year and announce its latest decisions on interest rate policy.

The S&P 500 index is up 1.1 percent, led by gains in energy companies as crude oil prices recovered some of the previous day's losses.

Other rising stocks include retailers, technology companies and other companies that tend to do better when economic growth improves.

Banks also rose. While investors expect the Fed to raise interest rates Wednesday afternoon, many of them believe the Fed will say it intends to raise rates in 2019 at a slower pace. That reflects signs the global economy isn't growing as quickly.

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5:45 a.m.

Stock markets are up slightly as investors look ahead of an expected rate hike by the Federal Reserve.

After a mixed performance in Asia, European indexes were up modestly and futures pointed to gains on Wall Street later Wednesday. Japan's Nikkei shed 0.6 percent but Germany's DAX was up 0.4 percent. Dow futures were 0.9 percent higher, while those for the S&P 500 were up 0.8 percent.

The Fed will likely hike its short-term interest rate after a meeting ends Wednesday. It is expected to raise the interest rate — used as a benchmark for many consumer and business loans — by a modest quarter point to a range of 2.25 percent to 2.5 percent. The central bank has forecast three more hikes in 2019, but investors doubt it would go as planned. Higher rates can slow economic growth and the U.S. economy is expected to cool off in 2019. China and Europe have also shown signs of slowing growth.

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12:05 a.m.

The Federal Reserve is expected Wednesday to raise its benchmark rate for a fourth time this year despite President Donald Trump's repeated assertions that doing so would be a terrible idea.

The president fired off two tweets this week objecting to a rate hike. In one of them, he called it "incredible" that the Fed would consider raising rates again when "the outside world is blowing up around us."

In the leadup to this week's meeting, Fed officials have signaled that they're set to raise rates Wednesday. Still, after Trump's stream of tweets, continued losses on Wall Street, persistent trade frictions and growing evidence of a global slowdown, some doubts have arisen among Fed watchers. The CME Group's index of investor expectations has put the likelihood of no rate increase Wednesday at 28 percent — an unusually high level of doubt on the eve of an anticipated Fed announcement.