Tough time ahead for investors with the FOMC meeting beginning today

Investors will have a tougher time assessing Federal Reserve policy when officials today replace interest rates with emergency credit programs as their main tool for steering the economy. That means analysts can’t base their predictions for Fed decisions on a simple interest rate benchmark for the first time since the FOMC began releasing policy statements in 1994.The FOMC will release a statement at about 2:15 p.m (GMT) on in Washington at the conclusion of a two-day meeting.

The FOMC statement in recent years has followed a clear structure: After a decision on the main interest rate came a paragraph on the economy, one on inflation and another one on the policy stance. The release usually ran about 100 words, fitting on a single page.
Since October, US interest rates have been reduced from 2% to 0.25%. With the FOMC meeting starting on January 28th and Obama finally in office, investors’ attention is turning to policy decisions and the Fed’s response to the crisis.s
According to Reuters FEDWATCH, there is a 75% chance that interest rates will stay at 0.25% and a 25% chance that the rates will drop to 0% for the first time in USA history!
In this scenario, the USD is expected, by some analysts, to decline substantially against all other currencies.
Crude oil inventories will also dominate the calendar on the 28th, as the market will watch how big the slide in demand becomes (all eyes turn to China).
The combined two events are expected to have a significant impact on price action on Wednesday, and might provide big market movements and excellent profit opportunities!