HERE COMES THE FED DECISION...

REUTERS/Jason ReedU.S. Federal Reserve Chairman Ben Bernanke opens a bottle of water as he prepares to testify at a Joint Economic Committee hearing on economic outlook and policy on Capitol Hill in Washington, June 7, 2012.

Heads up! We are minutes away from the final Federal Open Market Committee monetary policy decision of the year, as well as Ben Bernanke's final FOMC press conference as chairman of the Federal Reserve.

The statement detailing the FOMC's decision is due out at 2 PM ET. The press conference begins at 2:30 PM.

The #1 question on the market's mind is whether the Committee will announce a reduction in the pace of bond purchases the Fed makes each month under its quantitative easing program known as QE3. Right now, the central bank purchases $45 billion of Treasuries and $40 billion of mortgage-backed securities on a monthly basis, but the minutes of the most recent FOMC meeting in October revealed a growing preference to reduce the central bank's reliance on bond buying as a means of provide monetary stimulus.

The Committee refrained from beginning to taper down QE3 at its September meeting, a move that was widely expected by market participants at the time, on the grounds that the economy had not yet shown a sustainable improvement.

However, given the recent string of strong economic data, a growing number believe the Committee could announce tapering today.

The key question is what the Committee will do to offset a reduction in QE3. Many believe it will further modify its forward guidance on the path of short-term interest rates such that a rate hike is off the table at least until the unemployment rate falls to 6.0%.

Current guidance places the threshold higher, at 6.5%, but the unemployment rate has already fallen to 7.0%, and interest-rate markets are now pricing in the first rate hike around the time the FOMC forecasts the rate to fall to 6.0%.

In other words, markets have already priced in a reduction in the unemployment rate threshold, so it will be interesting to see how the Committee responds today.

We will have the full statement LIVE at 2 PM ET and full coverage of the press conference beginning at 2:30 PM. Click here to refresh for the latest updates »