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Stock index futures point to a higher open Wednesday after encouraging statements from Ukraine and Russia on negotiations.
But investors will also be looking ahead to the Fed announcement this afternoon.
Nasdaq 100 futures (NDX:IND) +1.7%, S&P futures (SPX) +1.2% and Dow futures (INDU) +1% are all higher after rallying sharply yesterday.
Europe is rallying sharply, with the Frankfurt DAX up 3%.
The Kremlin said that a neutral Ukraine with an army could be seen as a compromise. Ukraine President Volodymyr Zelenskyy, who addresses Congress this morning, said Russian negotiating positions are looking “more realistic.”
Rates are steady ahead of what is expected to be a quarter-point hike from the FOMC. The 10-year Treasury yield is flat at 2.16%.
“This is not the pandemic, where there was only one feasible policy path,” UBS chief economist Paul Donovan said. “The Fed has two contradictory policy options with higher commodity prices.”
“If the Fed worries about a wage-cost/price spiral, it will need to push growth below trend. Recession risks then rise substantially. If the Fed worries about demand shifts slowing growth and raising unemployment, it will tighten more cautiously.”
Oil prices have stabilized, with WTI down slightly, below $96 per barrel.
Also in global markets, China bounced back sharply, with Hong Kong closing up 9%.