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In the coming week, the Federal Reserve could decide to speed up the end of its bond-buying program and signal that it expects to start hiking interest rates in 2022.

That is already widely anticipated by investors, ahead of the Fed’s meeting Tuesday and Wednesday. Strategists don’t expect much market reaction, unless the central bank’s messaging includes a surprise or its forecast for interest rate hikes is more aggressive than expected.

In testimony before a Senate panel on Nov. 30, Federal Reserve Chairman Jerome Powell tipped the warning that the central bank would discuss speeding the taper of its $120 billion monthly bond purchases at the December meetings. His comments followed a parade of Fed speakers, who all suggested the central bank could end the program sooner than the current timeline of June 2022.

In the past week, stocks resumed their climb back toward highs after it became clear the omicron Covid variant is unlikely to cause a shutdown of the economy. Pfizer and BioNTech also gave investors some encouragement when announcing that a study found three doses of their vaccine provides a high level of protection against the variant.

“The bond market is taking some comfort in the Fed doing its job to address inflation,” said David Bianco, chief investment officer for the Americas at DWS Group. “To put this in context, if you go back to the 1960s, the average hiking cycle was 400 basis points.” One basis point is equal to 0.01%. That would mean four percentage points in rate hikes.

“Since 1982, if you start with the post great inflation period of the 1970s and early 1980s, since then the average hiking cycle is more like 250 to 300 basis points. The last cycle we got to 225 [2.25%]” Bianco said.

Bianco expects two quarter-point rate hikes next year, with the first in June. The following year, the Fed could increase interest rates four more times, but he does not expect the fed funds rate to get much higher. The fed funds rate is the interest rate at which large banks lend to one another overnight.

Upcoming projections from the Fed

The central bank is expected to release its quarterly projections for the economy, inflation and interest rates when it releases its statement at 2 p.m. ET on Wednesday. Powell will brief reporters at 2:30 p.m.

In its last forecast, the Fed’s so-called dot-plot chart of inflation forecasts shows that half the Fed officials expected one or two rate hikes next year, but there was no consensus for a hike. The first hikes were in 2023. That is likely to change in the updated forecast, with possibly two hikes penciled in for next year.

Powell also acknowledged during his recent testimony that inflation could be more of a problem than the central bank thought, and that it was time to retire the description of inflation as “transitory,” or temporary. Indeed, the consumer price index for November surged to its fastest rate in nearly 40 years.

Credit Suisse strategists raised their 2022 forecast for the S&P 500 to 5,200 in the past week because of the strong economy and improving earnings and margins.