Fed Makes No Changes To Dot Plot, Hinting At December Hike

But its stimulus efforts that have kept rates near historic lows since 2008 have failed to boost inflation.

She said the Fed would adjust its policymaking if it thought the causes of low inflation had become permanent.

Asian shares edged down slightly on Wednesday as investors awaited monetary policy news coming at the conclusion of the US Federal Reserve's two-day meeting. It has also trimmed its inflation forecast.

At 11:02 a.m. ET, the Dow Jones Industrial Average was down 1.88 points, or 0.01 percent, at 22,368.92, the S&P was down 1.73 points, or 0.07 percent, at 2,504.92 and the Nasdaq Composite was down 26.50 points, or 0.41 percent, at 6,434.82. The Philippine and Taiwanese central banks also make rates decisions later in the day.

Tesla was down 1.86 percent after Jefferies started coverage of the electric vehicle maker's stock with "underperform". That would mean inflation would fall short of the Fed's 2 percent target for the sixth straight year.

"It seems the market is holding its breath and waiting for what the Fed has to say regarding the economy and any future interest rate hikes", said Ryan Detrick, senior market strategist for LPL Financial.

Record-high world stocks paused yesterday and the dollar dipped, as investors waited for signals from the Federal Reserve on when it will start shrinking its balance sheet and nudge up U.S. interest rates again. The most recent increase took place in June.

Oil prices were higher. They now expect there will likely be two hikes, down from three. The Fed also announced its plan to reduce its $4.5 trillion balance sheet. The initial cut will be $10 billion per month, probably beginning in October.

The biggest percentage gain was the telecom services sector's.SPLRCL 2.3 percent jump on merger and acquisition speculation.

With Hurricanes Harvey and Irma clouding some economic data - temporarily raising gas prices, likely restraining hiring and potentially depressing growth in the July-September quarter - some analysts assumed the Fed wouldn't have enough information by December to assess whether the economy had rebounded from the storms.

With no meaningful economic releases on the docket in the Eurozone today, the Euro will be driven nearly exclusively by the Federal Reserve meeting at 19:00 United Kingdom time.

"The market could throw a little bit of a fit if they push (balance sheet reduction) back".

Financial markets are largely subdued as investors remain cautious ahead of the Federal Reserve's announcement of its monetary policy meeting.

Elevated risk appetite in Europe, meanwhile, saw the gap between Portuguese and Italian 10-year government bond yields narrow to levels not seen since the start of the euro zone debt crisis of 2010-2012. The move will gradually increase long-term borrowing rates.

If the Fed discloses date of reducing its balance, then the sharp increase in the U.S. dollar rate may occur.

The Fed made no change to its so-called "dot plot" of rate projections for this year and next, strongly hinting at a December rate hike.