U.S. stock futures were mixed and somewhat flat Wednesday morning as investors awaited the Federal Reserve rate decision and policy statement set for this afternoon after a two-day meeting that began Tuesday.No major decision is expected from the Fed when it announced its policy decision at 2:15 p.m. Eastern. The Fed is expected to keep rates at record low levels, but investors will watch for any indication it may soon end its very loose monetary policy. While the Fed is expected to announce that the recession is likely over and that the economic and financial climate is improving, it will also likely continue to warn about the difficult employment market, and still hard-to-get-credit. These can make any recovery very subdued.
And just as the Fed will warn about the rising unemployment, the House passed a bill to extend unemployment benefits in states with over 8.5% unemployment rate by 13 weeks. Similar legislation is pending in the Senate. The longtime unemployed in states with lower levels of joblessness would not get the extension.
Overseas, most Asian markets closed moderately lower. Japan's market was closed for a national holiday. European stocks, however, sought direction Wednesday as they also waited for the U.S. Fed.
Oil prices, meanwhile, hovered above $71 a barrel Wednesday as signs of weak crude demand were offset by the effects of a slumping U.S. dollar, which tumbled across the board in Asia on Wednesday, hitting fresh annual lows against the euro, and other currencies. At 10:30 a.m., weekly crude inventory data are due out.
Finally, U.S. mortgage applications jumped last week to their highest since late May as interest rates tumbled below 5%, the Mortgage Bankers Association said.
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