Futures are rallying ahead of the Fed

The big day for the Federal Reserve is finally here, and stock futures are rallying ahead of the opening bell.

Near 6:56 a.m. ET, Dow futures were up 95 points, S&P 500 futures were up 10 points, and Nasdaq futures were up 245 points — all by about 0.5%.

Pre-market, the US dollar index was virtually unchanged while government bonds sold. The benchmark 10-year note yield was at 2.27%, up by one basis point.

Meanwhile, crude oil is under some pressure after two pieces of news: the American Petroleum Institute on Tuesday reported a build in US inventories by 2.3 million, against an expected decline of about the same amount. And, Congressional leaders agreed to lift the 40-year ban on US exports, although it still needs to get through the House and the Senate, and then be signed by President Obama.

Brent crude, the international benchmark, slumped 2% to as low as $37.61 a barrel, and nearly closed its spread to West Texas Intermediate crude, which was down by less than 1% and near $37.19.

The Fed takes center stage at 2 p.m. ET, when its statement is expected to announce that it is raising the target range of the federal funds rate by 25 basis points to 0.25% – 0.50%. Coincidentally, it was on this day in 2008 that the Fed started its so-called near-zero interest rate policy to stimulate the economy.

The statement will be accompanied by updated projections on the economy and future interest rates by the policy-setting committee. These will be followed by a press conference with Fed Chair Janet Yellen at 2:30 p.m.

But there’s other data to watch before then: housing starts and building permits at 8:30, industrial production and capacity utilization at 9:15, and manufacturing PMI at 9:45.

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