I don’t expect anything much from the Fed meeting today. I don’t think we are going to see QE III announced between now and the election even though according to CNBC most traders expect it. But, the Fed almost has to buy Treasury debt in huge amounts or Treasury interest rates will go up quite a bit from their extraordinarily low current levels. Without strong Fed buying, it is doubtful that there is enough buying interest to soak up the huge deficits that are being financed. Roughly $100 billion a month is being borrowed.
In Europe, the European Central Bank concludes its meeting tomorrow and I would guess they will announce something. Mario Draghi, head of the ECB pretty much painted the ECB into a corner when he announced recently that he would not let the Euro fail. That caused soaring Italian and Spanish interest rates to drop some but if that promise is not followed very soon by concrete action yields will go right back up, probably even higher than the levels before the announcement.
So tomorrow should be more interesting than today in terms of Central Bank announcements. The markets will react Thursday and Friday to what they hear or don’t hear.