This afternoon, the Federal Open Market Committee (FOMC) will announce there interest rate policy statement. Most traders and investors are expecting the Federal Reserve to keep the Fed funds rate (overnight lending rate to the large banks) at zero percent. It is important to note that the Fed funds rate has been at zero percent since December 2008. Many investors are waiting to hear if the Federal Reserve Chairman Ben Bernanke mentions another plan to implement QE-3. While this action is not anticipated to happen at this time, the Bernank may hint that quantitative easing is possible in the future.
Traders should expect these markets to remain very volatile throughout the trading day. There are major problems in the European Union and the markets are reacting to every news report out of the region. The major financial stocks have begun to roll over this morning. This is certainly a sign that the news leaking out of the Euro-zone is not beneficial to the financial stocks. This will put even more pressure on the Federal Reserve to say something positive this afternoon.