Investors are focusing on the US Federal Reserve policy meeting today (December 17th), with analysts predicting the institution will announce it is still on track to raise interest rates in 2015.
Tumbling oil prices, along with the economic woes of the eurozone, Japan, China and Russia should not change the Fed's plan of action, as a series of recent data show the US economy seems to be on the path to recovery.
It will be a tightrope moment for the Fed, whose job is to "condition" markets for a coming rate hike next year without "freaking out the markets," Greg McBride, chief financial analyst at Bankrate told USA Today.
He expects the Fed to finally jettison from its post-meeting statement the phrase "considerable period of time."
The Federal Reserve said on September 17th that there was no "calendar date" for an interest rate rise, adding it will do so once a "considerable time" has passed after its stimulus programme ends in October.
In a statement, the institution noted that the "the Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's two per cent longer-run goal, and provided that longer-term inflation expectations remain well anchored."
Fed chairwoman Janet Yellen added: "If the events surprise us and we are moving more quickly toward our objectives and the Committee sees a need to move sooner, or later depending on what the data is… I do feel we have the flexibility to move. As I have said repeatedly, the decisions that the committee makes about what is the appropriate time to begin to raise its target for the federal funds rate will be data dependent."
A statement on monetary policy for the next six weeks is due to be released at 14:00 ET today.
Find up to date information on the FTSE 100 and spread betting strategies at City Index.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.