The markets are closely watching the Fed's 2-day meeting, on alert for any change in their statement, and for any unexpected comments at the press conference with Fed Chair Janet Yellen. Bobbi Rebell reports.
The rate debate is heating up. The Fed kicked off its highly anticipated 2-day policy meeting on Tuesday. Many economists expect the central bank policymakers to take the "patient" wording out of their statement as a step toward raising rates. But that would be a mistake says John Lonski, Chief Financial Markets Economist, at Moody's Analytics. SOUNDBITE: JOHN LONSKI, CHIEF FINANCIAL MARKETS ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "I would be surprised if the Fed drops any reference to patience in its policy statement. Mostly because the U.S. economy has slowed moreover the world economy remains sluggish while at the same time the dollar has been rising sharply so if the Fed takes out the word patience the Fed risks an unwanted rise by the dollar exchange rate that could rattle financial markets. Lonski would like to see the Fed address a number of emerging trouble spots: SOUNDBITE: JOHN LONSKI, CHIEF FINANCIAL MARKETS ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "I think it would be interesting if the Fed made some reference to a slower than expected pace of US business activity because of lower energy prices, soft commodity prices and the stronger dollar. moreover I would look for the Fed to make some mention of the persistent weakness outside the United States, especially Europe, and dynamic emerging market countries such as Brazil China and Russia." Here in the U.S.- bets on what the Fed will do- depend on who you ask says Reuters' Jonathan Spicer: SOUNDBITE: JONATHAN SPICER, REUTERS FED CORRESPONDENT (ENGLISH) SAYING: "The traders are still sort of looking at September for "lift off." If you talk to Wall Street economists, those who sort of pay a little bit closer attention to what these Fed policy makers are saying they are looking a little more to June." A press conference will follow the release of the Fed statement. It'll mark one year since Yellen first faced the media as Fed Chair.