Almost no one expects the Federal Reserve to announce another interest rate hike on Wednesday, but all eyes are focused on whether the US central bank turns more bullish in its outlook.

Long-awaited signs of strengthening inflation have appeared in US economic data that would support the Fed signaling more tightening ahead, even as the global economic outlook has weakened.

But with other central banks easing monetary conditions and worries that tighter US policy could spur more turmoil in global markets, the Fed has to walk a cautious line about what it indicates for the future.

The Federal Open Market Committee (FOMC), led by Fed Chair Janet Yellen, will release its updated policy statement at 2:00 pm (1800 GMT).

They will also release new forecasts for economic growth, unemployment, inflation and interest rates, and Yellen will then explain the decision in a press conference.

At stake is the pace of expected increases in the benchmark federal funds rate, which the Fed increased for the first time in more than nine years in December, to a still ultra-low 0.25-0.50 percent.

At the time FOMC forecasts implied expectations of four more quarter-point increases over this year.

But in the months since then economic growth has sagged slightly and inflation, which the Fed wants to see pick up to 2.0 percent, has remained weak.

Yet data is mixed: Hiring has remained strong and home construction and auto sales robust, while exports and industrial output are weak and overall consumer spending softer than expected.

Fed Vice Chair Stanley Fischer said last week that he expects that after the oil market crash bottoms out -- and some people think it has now -- the economy and inflation will appear much stronger than currently.

Early Wednesday the consumer price index (CPI) for February showed an overall fall due to sinking fuel prices, but the core was up 0.3 percent and 1.7 percent year-on-year -- though still shy of the 2.0 percent target.

Industrial output was also down in February, but mainly on slower activity in mining and utilities, while manufacturing, hit over the past year by the strong dollar, increased.

"Not bad for a sector allegedly pulling the whole economy into recession... the deterioration seen last year appears to be over," said Ian Shepherdson at Pantheon Macroeconomics.

That picture has left analysts forecasting between one and three rate increases this year.

After the last several inflation numbers, it seems the hawks will win the debate for a rate hike in the first half of 2016.