Top officials of the U.S. central bank are discussing how much and how soon to reduce their efforts to speed up economic growth.
The chairman of the Federal Reserve will report their decisions Wednesday afternoon at 2:30 p.m. Ben Bernanke has previously said the bank will cut stimulus efforts if the unemployment situation improves further or inflation rises strongly.
Stock markets have been very volatile as nervous investors try to guess what the Fed will do.
Back in 2008, the Federal Reserve cut short-term interest rates to a record low level in a bid to boost economic growth. When that produced disappointing results, the Fed added a complex program to cut long-term interest rates involving $85 billion a month in asset purchases.
Stimulus efforts focus on low interest rates, because they make it cheaper for businesses to finance new equipment, expand factories, and hire new people. But if a stimulus program goes on too long, it can overshoot and spark inflation.