Stock futures signal hiatus ahead of Fed meeting


US equity futures wavered as investors waited for the latest economic outlook from the Federal Reserve and any signs on interest rates and bond purchases for the next few years.

Futures pegged to the broad S&P 500 Index and the Dow Jones Industrial Average were relatively flat, suggesting that the benchmark indices may be choppy after the market opens. Both indicators posted tepid lows on Tuesday, a day after closing at records. Contracts tied to the high-tech Nasdaq-100 fell 0.3% on Wednesday.

Federal Reserve officials, who are scheduled to release their latest economic projections at 2 p.m. ET, are likely to say they expect the labor market and inflation to rebound faster than they anticipated in December. Overall, the central bank is expected to reaffirm its commitment to ultra-low interest rates and bond purchases for now.

Money managers have already started pricing in rising inflation, prompting a sell-off in government bonds, and are betting that interest rates will start to rise by the end of next year. They have also started exiting stocks that appear to be overpriced after last year’s rally.

“Markets in general are expensive today, and that depends on the backing of the central bank,” said Hugh Gimber, strategist at JP Morgan Asset Management. “So this whole market is very, very sensitive to changes in central bank policy.”

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