The Federal Reserve is expected to announce a dramatic policy shift Wednesday that will clear the way for a first interest rate hike next year.
Markets are anticipating the Fed will speed up the wind-down of its bond buying program, changing the end date to March from June.
"I think getting out of the easing business is very much overdue," said Rick Rieder, chief investment officer of global fixed income at BlackRock. While the Fed is expected to sound hawkish, or in tightening mode, Fed Chairman Jerome Powell could sound much less so when he speaks to the press at 2:30 p.m. ET Wednesday, 30 minutes after the statement and forecasts are released by the central bank.
"That would be very surprising to the market if he came out and said we don't need to keep the size at these levels," said Rieder. The Fed is more likely to reduce the balance sheet after it raises interest rates, he said.
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