US stock futures hesitated as investors awaited the latest Federal Reserve economic outlook and signals on interest rates and bond purchases for years to come.
Futures pegged to the broad S&P 500 index and Dow Jones Industrial Average were relatively flat, suggesting that benchmarks may be choppy after the market opens. Both meters posted lukewarm dips on Tuesday, a day after closing time at records. Contracts related to the tech-heavy Nasdaq-100 fell 0.3% lower on Wednesday.
Federal Reserve officials, scheduled to release their latest economic projections at 2 p.m. ET, are likely to say they expect the labor market and inflation to pick up faster than they expected in December. In general, the central bank is expected to reaffirm its commitment to ultra-low interest rates and bond purchases for the time being.
Money managers have already started charging for a rise in inflation leading to a sell-off in government bonds, betting interest rates will rise by the end of next year. They have also started exiting stocks that appear to be too rich after last year’s rally.
“Markets across the board are expensive these days, and that’s based on central bank support,” said Hugh Gimber, a strategist at JP Morgan Asset Management. “So this whole market is very, very sensitive to changes in central bank policy.”