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That is the concern ahead of the minutes, which kick-off an intense two-week period for the Fed. New Chairman Jerome Powell will testify twice to Congress on Feb. 28 and March 1 about the outlook for interest rates. Fed watchers think that the minutes will give a good preview of Powell’s prepared remarks to lawmakers.

Markets are obsessed with inflation, worried that the central bank may have to tighten at a faster pace given the tax cuts and additional spending approved by Congress this year. The minutes might contain some clues about the Fed’s thinking.

The policy statement released after January meeting leaned hawkish, as officials said that inflation “is expected to move up this year,” rather than previous language that the price level would “remain somewhat below 2% in the near term.” In addition, the statement said the central bank expects to deliver “further” gradual increases in the federal funds rate.

Here are five things to watch for in the minutes released on Wednesday at 2 p.m. Eastern.

3 or 4 rate hikes this year

In December, the Fed penciled in three rate hikes in 2018. A key question of the minutes is whether the minutes hint that rate projections will be revised up at its March meeting, said Paul Mortimer-Lee, head of U.S. economics at BNP Paribas. In December, a “few” Fed officials thought more rate hikes were needed. Mortimer-Lee said he would be watching to see if a “few” turns into “several.” Economists said the minutes should signal a March hike, but said that this is already priced into markets and would not be a surprise.

The rationale for adding “further”

Economists are particularly interested in the rationale for adding “further” as a qualifier for future rate hikes. Economists are divided on what it means. “Going into the minutes, we expect that represents slightly more confidence that economic strength will support more hikes - not a signal of a major shift toward more hawkish policy,” said Andrew Hollenhorst, U.S. economist at Citigroup. On the other hand, Tom Porcelli, chief U.S. economist for RBC Capital Markets, said “further” is a “preamble to perhaps a more forceful tone on rate hikes as the year progresses”

Discussion of fiscal policy

The January meeting should provide clues about how much the Fed believes growth prospects have improved since the passage of the tax cuts. Does the fact that the government is pumping money into the economy gives the Fed a window to hike rates at a faster pace? “Any discussion along those lines could spook markets that have begun to grow wary of such a scenario,” said Kevin Cummins, senior U.S. economist at NatWest Markets. On the other hand, any argument in the minutes that the tax cuts need not be inflationary could reassure markets.

Inflation outlook

The minutes should show that the Fed is more comfortable with the idea that inflation will be heading higher, albeit gradually, said Michelle Meyer, U.S. economist at Bank of America. The statement made key changes around inflation that sent a hawkish signal. The Fed noted that inflation should move up this year and stabilize around 2%. “Given the changes to the inflation language, we expect a lengthy discussion around inflation risks with opinions on both sides of the debate, but generally leaning toward acceptance that the trend will be higher,” Meyer said. The surprising gains in inflation and wages in January were not reported until after the Fed’s meeting so the markets will have to wait for Powell to discuss the reports in his testimony.

Financial stability

The Fed meeting was prior to the brief stock-market sell-off earlier this month. The minutes are expected to contain a discussion about financial stability risks and stretched valuation given how quickly the stock market ran up throughout January. A Powell Fed “will not be so easily unsettled by short-term market movements and volatility,” said Cummins of NatWest. He noted that Powell is “quite knowledgeable” on financial markets from his days as a partner at the Carlyle Group.

Reference: Market Watch