U.S. futures steady as Fed decision looms

U.S. stocks steadied as traders braced for the Federal Reserve to accelerate its removal of monetary stimulus.

U.S. stocks steadied as traders braced for the Federal Reserve to accelerate its removal of monetary stimulus. 

The S&P 500 was little changed, while shares in U.S.-listed Chinese firms retreated after the Biden administration was said to be considering tougher sanctions. U.S. retail sales rose by less than forecast in November, suggesting that consumers are tempering purchases against a backdrop of the fastest inflation in decades.

Traders are looking to a wave of central bank decisions for clarity on the timing of a pullback, with the Fed decision due later on Wednesday, followed by the Bank of England and European Central Bank Thursday. The Fed is set to unveil a quicker tapering of bond purchases, paving the way for the first interest-rate increases since 2018 as it pivots to restraining the hottest inflation in almost 40 years.

The mix of intense price pressures -- U.S. producer-price inflation hit a record of almost 10 per cent, while U.K. inflation surged to its highest level in more than a decade -- diminishing central bank support and economic uncertainty around the omicron virus variant is testing markets. 

The pound ticked up and money markets boosted bets on rate hikes after data showed U.K. inflation topped 5 per cent in November. With new government restrictions adding to economic uncertainty, investors and economists still expect the Monetary Policy Committee to delay any move until February.