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Here comes the Fed ...

Dec 14, 2017, 00:07 IST

Mark Wilson/Getty Images

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The Federal Reserve will at 2 p.m. ET release a policy statement following its two-day meeting.

The Fed is widely expected to announce its third interest-rate increase this year, raising its benchmark fed funds rate by 25 basis points to a range of 1.25-1.50%. This would eventually lift the interest rates banks charge customers for various credit products like mortgages and loans.

The Fed would hinge its decision to raise rates on the US economy's faster-than-expected growth in recent months and strong job creation. Inflation, however, is still below the Fed's 2% target. The Fed anticipates that a tightening labor market would create the demand necessary to raise prices.

Futures traders see a 100% chance of a rate hike today, according to Bloomberg's world interest rates probability function. So the hike won't be the main news for them. Instead, it likely will be the Fed's economic forecasts, and anything they say about the impact of fiscal stimulus in the form of tax cuts.

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Republican leaders on Wednesday reached an agreement on their final tax bill, paving the way for a federal tax code overhaul by Christmas.

Starting at 2:30 p.m., Janet Yellen will hold her final press conference as chair of the Fed. Jerome Powell, President Donald Trump's nominee to replace her, is awaiting Senate confirmation following a 22-to-1 acceptance from the Senate Banking Committee.

Refresh this page for the latest at 2 p.m. ET.

NOW WATCH: THE BOTTOM LINE: Tax reform, expensive tech stocks, and the Fed's massive balance sheet unwind

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