No expected rise in interest rate of Fed but the tone and analysis after good data will be crucial

The Fed could sound slightly more upbeat about the economy after its meeting Wednesday, and that could be enough to reinforce Wall Street's growing view that a rate hike is coming in December.

What the market is hoping to hear in the Fed's post-meeting statement Wednesday is how it now views Brexit and its impact on the world economy. That's important since Fed officials cited Brexit as one of the reasons why they did not hike interest rates in June, along with the surprising weakness in May's jobs report.

„We've got record levels of equities. We have volatility that's settled down. There's not much concern about contagion through financial institutions. A lot of us are looking for any diagnosis of that situation."

Following the Brexit vote, expectations in the Fed funds futures market were at a low point, where the market bets were even pointing to a rate cut in December which may have a negative effect on the stock market and support the dollar.

There is no expectation for a rate hike Wednesday, but the market odds for a September rate hike have risen to nearly 30 percent on a spate of recent data. That includes Tuesday's new home sales for June, which grew at the best pace since early 2008.

The Fed may not tweak the language in its statement too much or put any new emphasis on timing. Robert Tipp, Prudential Financial head of global bonds and foreign exchange, said the Fed will also not want to trigger market volatility or a move higher in the dollar that could hurt the U.S. economy, in anticipation of a rate hike.

"I think the Fed is probably not altogether happy in sensing that equity markets around the world are trading largely on expectations that no central bank will have the courage to exercise policy any time soon," Tannenbaum said.

Expectations are mixed and it is very important how Fed will weigh the risk of Brexit. Bearing in mind that risks will not occur soon, Fed should prove the way for further interest rate hike because we can see bubbles in many sectors such as the stock market. So we have reason to believe that is logical Fed to be optimistic about the economy.