My personal view is that they will steer well-clear of signaling more QE3 as the economy has shown some moderate strength in recent months. With Europe still an open question, it would make sense for the Fed to keep some powder dry in case Europe goes into a tailspin and drags the rest of the global economy down with it.

Watch for any statements that the Fed wants to support the housing market. If, so, that would be a sign f more QE, and the USD will slide. If no mention, perhaps we get a modest dollar rally and stock sell off.

The announcement comes at 12:30 Washington time (20 minutes from now, the Fed funds projections at 2:00 and a Bernanke presser at 2:30.