The Federal Reserve meets Tuesday and Wednesday this week, and investors are overwhelmingly expecting interest rates to remain unchanged.

But that doesn’t mean borrowing costs are headed lower anytime soon.

The central bank raised its benchmark rate in September to a range of 3.75% to 4.00%, attempting to contain inflation that continues to exceed its 2% target.

Now, financial markets are pricing in roughly a 90% chance that the Fed will leave rates unchanged on Wednesday.

The bigger question is what happens next.

With the November 3 election just days away, a pause this week would not necessarily signal the end of tightening, particularly with the possibility of an expanding war threatening to push energy prices and inflation higher.

Economists increasingly expect another quarter-point increase in December, as persistent inflation and elevated energy prices complicate the Fed’s efforts to stabilize the economy.

But the Fed faces a difficult balancing act.

Raising rates too aggressively could discourage investment and weaken economic growth.

Moving too slowly could allow inflation to become more deeply entrenched.

For investors, Wednesday’s decision may be less important than what Federal Reserve Chair Kevin Warsh says afterward.

If the Fed signals that additional increases are necessary, financial markets could begin adjusting to higher borrowing costs well into 2027.

Even if the Fed eventually brings inflation under control, lower inflation does not mean prices return to where they were.

A decision to hold rates steady this week may offer some reassurance, but it would do little to resolve underlying uncertainty.

For American businesses and households, the question is how much further the Federal Reserve is willing to go.