The Federal Reserve is expected to take aggressive action to tame inflation.
The futures on the stock market gained some ground. S&P 500 futures were little changed and the 100 futures were little changed.
The S&P 500 fell deeper into bear market territory on Tuesday after five days of losses. The benchmark has fallen more than 4% this week and is now off 22% from its all-time high. The blue-chip index fell for a fifth day in a row. The index ended marginally higher.
The Federal Open Market Committee will meet again on Wednesday. According to the FedWatch tool, the market is betting on a 75-basis-point rate hike. The basis point is 0.08.
The shift to price in a larger-than- usual rate hike came after headlines that Fed officials were contemplating such a move following a surprisingly hot inflation reading.
The headline was changed from 50 basis points to 75 basis points in order to emphasize the Fed's commitment to price stability. It isn't a trial balloon or a lead balloon, it's reality.
The press conference will take place at 2:30 pm. The central bank made a decision. He will be watched by investors to see how he speaks about the Fed. The outlook for the central bank's benchmark rate will be released.
The rate hike has caused the yield on the Treasury to jump dramatically. The two-year rate went up 40 basis points this week alone, hitting its highest level in seven years. The 10-year yield hit a high not seen in more than two years.
The central bank can regain credibility if it acts aggressively to fight inflation.
Inflation has gotten out of control thanks to the Fed. The equity and credit markets have lost confidence in the Fed. If the Fed takes aggressive action tomorrow and in July, market confidence can be restored.
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