Stocks were little changed Wednesday as traders looked ahead to the Federal Reserve’s latest decision on monetary policy as well as Jerome Powell’s first news conference as chair.
The Dow and SP 500 both opened around the flatline, while the Nasdaq composite added 0.15 percent. Chevron was the best-performing Dow component, while the SP 500 energy sector outperformed.
Wall Street largely expects the central bank to announce a rate hike after a two-day meeting. Market expectations for a 25 basis-point bump in overnight rates were at 94.4 percent, according to the CME Group’s FedWatch tool. Investors will also look for clues about the Fed’s tightening trajectory for the rest of 2018.
“First, they will hike rates 25 bps to 1.50-1.75%. Second, there will be an obsession with the dot plot,” said Peter Boockvar, chief investment officer at Bleakley Financial Group, in a note.
The so-called dot plot refers to the Fed funds rate projections from the central bank’s policymakers. The last batch of dot plots, released in December, showed the Fed expects to raise rates three times this year. Some market experts believe it is possible the Fed could increase its 2018 projections to four rate hikes.
The central bank will announce its decision Wednesday at 2 p.m. ET. Wall Street will also zero in on Chair Powell’s first news conference in the position at 2:30 p.m. ET.
“Anything is possible in Powell’s press conference but I’m inclined to think he wants it to be as boring as possible because why talk about a 4th hike