The FOMC decision is coming up in about 40 minutes (at 1615 GMT).
The only open debate relates to communication. There is talk the Fed could remove its calendar guidance (ie “exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.”). It would be replaced with some type of economic guidance, like a pledge to keep rates low until some type of employment/growth metric picks up.
Such a move is unlikely (less than a 20% chance) but could spark some volatility in short-term debt markets. In any case, it won’t impact FX beyond the regular 10-20 pip post-Fed volatility.
The economic assessment could boost sentiment if the Fed shifts to more upbeat rhetoric on jobs and housing.
Overall, expectations for action are as low as they have been in a long time. If Bernanke wanted to shock the market (and endure some political wrath) now would be the time.
