Stocks dropped in early afternoon trading on Wednesday ahead of the Federal Reserve’s meeting on interest rate policy. Oil prices dropped even further.
The Federal Reserve will conclude its two-day meeting at 2pm ET. Experts are expecting the Fed to ask for patience as it weighs interest rate increases. An increase may come as early as June. Experts say the Fed wants to maintain flexibility as it makes an attempt to increase rates.
A six-paragraph statement will be released after the meeting. Revised economic forecasts will also be released as well as the interest rate “dot plot” path. Janet Yellen, Fed Chairwoman, will be speaking at a news conference at 2:30pm ET.
Since the financial crisis in 2008, the Fed’s benchmark rate has remained close to zero and has helped drive the bull market we’ve seen over the last six years.
Just prior to the Fed announcement, the Dow Jones was down more than 100 points (0.7%). Nasdaq is down 0.4% and the Standard & Poor 500 dropped 0.3%. Oil also fell below $43 a barrel while U.S. benchmark crude tumbled to $42.56, down 2.1%. The decline came ahead of the Energy Information Administration’s weekly information release on petroleum inventories.