Experts say risk aversion – or a flight to traditionally safe assets – will dominate sentiment.
Developments around the Verizon Wireless stake are likely to continue to dominate sentiment and on this subject we remain optimistic that there will be change.
But the U.S. should be able to grow in the coming months and years, avoiding the crash scenarios that are dominating sentiment.
Ahead of the meeting today oil rose by more than a dollar, taking it above $44 as the expected supply cut dominated trading sentiment, offsetting concerns that slowing economies will weigh on fuel demand.
"Continued scepticism over this concept of green shoots of recovery is dominating trader sentiment," said Matt Buckland, a dealer at CMC Markets.
Alongside the bond market, the other key theme dominating investor sentiment is US earnings, with a plethora of results due this week from companies including Bank of America, Goldman Sachs and Intel.
Joshua Mahony, market analyst at IG, said: [The] Federal Reserve Open Markets committee meeting continues to dominate market sentiment, with many worrying that we could see something similar to last year, where a rate hike marked the beginning of a sustained correction in the Dow.
Instead of the usual "risk on, risk off" scenario (RoRo), we've become used to, now we have to contend with the new "taper on, taper off" scenario or (ToTo) which is likely to dominate market sentiment until the next Fed meeting on June 18th and 19th, and even possibly beyond that.
