The Fed is widely expected to slash interest rates at the conclusion of its latest two-day policy gathering, although the size of the possible drawdown and commentary around the move remain a source of debate.

Markets are all but certain the central bank will cut borrowing costs by at least 25 basis points from the current target range of 4.25% to 4.5%, while there is also a slim chance of a deeper, half-percentage point reduction.

Underpinning these estimates have been signs of a weakening U.S. labor market, which are seen overshadowing simultaneous indications of sticky inflation. In theory, a rate cut can help spur investment and hiring, albeit at the risk of driving up prices.

How the rate-setting Federal Open Market Committee, and, more specifically, Chair Jerome Powell, view the trajectory of the job market and inflation will be in sharp focus. Policymakers now face pressures to both sides of its dual mandate: maximizing employment while maintaining price stability.

Along with the more qualitative statements from the FOMC and Powell, the Fed will release an updated look at its members' rate projections for the months ahead a closely-monitored chart known as the "dot plot."

"Inflation remains above target and tariffs are likely to keep it elevated in the near term, but the balance of risks are tilted towards the need for more support for the economy," analysts at ING said in a note.

Source: Investing.com