What to expect from Fed's decision today at 21:00 local time

The Federal Reserve is expected to raise interest rates by a quarter point Wednesday and signal it will not be pushing rates higher as much as it had previously forecast.

Strategists say that may soothe volatile financial markets, but the Fed has a tough task in explaining its actions in a way that will not sound too alarmist about the economy or too unconcerned about deteriorating financial conditions.

The Fed is seen as likely to take the fed funds rate range to 2.25 to 2.50 percent and to remove language in its post-meeting statement that says it will continue with "gradual" rate increases. The Fed has said it expected to raise interest rates three more times next year, but economists now think that will change to show two more hikes next year, with another possible in 2020.

"The economy is decelerating. They were too optimistic on their outlook, but by the same token, they're going to have to walk a fine line that they're not overly concerned," said George Goncalves, head of fixed income strategy at Nomura. "They're just going to take it down a notch."

"I do think the Fed will try and likely succeed in sending a comforting tone to the equity market," said Mark Cabana, head of U.S. short rate strategy at Bank of America Merrill Lynch. "I think the market is forcing the Fed to deliver a very dovish hike. We think 2019 dots will come to two. 2020 will show one hike but just above 3 percent. The Fed will make some changes to show they are less on a preset course and more data dependent."

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