During this week's meetings Federal Reserve officials must weigh improving economic data against the risk, created by a weak job market, that a burgeoning recovery remains on shaky ground.
A 3.5 percent annualized jump in third quarter gross domestic product revived debate between analysts who believe a sustainable turnaround is under way, and those who think growth will falter once a heavy dose of stimulus fades.
The uncertainty is evident within the Fed itself, with many policymakers emphasizing the hazards in their outlook, even as they vow to vigorously fight any early signs of inflation.
With inflationary warning signals largely absent, an immediate shift in the central bank's ultra-easy policy stance, including any tinkering with its pledge to keep interest rates low for an "extended period," appears unlikely, Reuters report.
It was also reported, the FOMC will release a monetary policy statement around 2:15 p.m. tomorrow in Washington. A Labor Department report two days later may show the jobless rate rose to 9.9 percent in October, even as the economy returned to growth.
Fed officials say purchases of housing debt have helped lower borrowing costs, boosting the part of the economy that was at the epicenter of the economic crisis. The average rate on a 30-year mortgage was 5.03 percent last week, down from 6.46 percent a year earlier, according to mortgage company Freddie Mac.
Rates on 30-year mortgages could be a full percentage point higher by March as the economy strengthens and the Fed stops its purchases, says Nicholas Strand, a mortgage-backed securities strategist at Barclays Capital Inc. in New York, Bloomberg reports.
In the meantime, the dollar held steady on Tuesday before the start of the U.S. Federal Reserve's policy-setting meeting, while the Australian dollar fell after its central bank raised rates but took a cautious stance going forward.
Falls in European share prices also supported the dollar, which has a tendency to gain when investors shed risk assets. Movements in the foreign exchange market were further dulled because Tokyo markets were closed for a national holiday.
The dollar fell as stocks gained the previous day after data showed a pick-up in manufacturing activity round the globe, but later lost some ground on concerns about the banking system.
Sterling tumbled against the dollar on Tuesday when details were published of a shake-up of some government-acquired banks, Reuters report.
The Amsterdam Court of Appeal ruled the Scythian gold to be the property of Ukraine and ordered to deliver museum exhibits it to Kiev