Analysts, consumers await Federal Reserve’s moves during 2-day meet

Heller, who served on the Board of Governors of the Federal Reserve System from 1986 to 1989, is confident the US economy is well positioned to cope with a rise in interest rates from the current 0-0.25 percent.

At the closing bell, the Dow Jones Industrial Average stood at 16,736.76, up 136.91 points (0.82 percent).

All eyes will be on the Fed as it begins its meeting later on Wednesday and holds a conference on Thursday, when it will announce if it will raise long-term interest rates for the first time since June 2006.

The last time the Fed raised rates was in June 2006 when they peaked at 5.25 percent.

Significant strength was also visible among energy stocks, which moved higher along with the price of crude oil.

Short-term US bond yields US2YT=RR held below a near 4-1/2 year high and gold prices XAU= rose on the news the U.S. Consumer Price Index fell 0.1 percent in August.

The Fed’s inability to receive more phone calls confirms it is “unused to actual public engagement”, Fed Up campaign director Ady Barkan wrote in an email to The Huffington Post.

Policy makers at the US Federal Reserve were today beginning a two-day meeting to decide on whether to raise interest rates for the first time in more than a decade. Employment has improved since the financial crisis, but inflation has remained low, in part due to a slump in energy prices over the previous year.

Policymakers are considering a rate increase to keep America’s strengthening economy from overheating, a decision that could potentially roil financial markets around the world.

The broader Topix gained 0.7 percent to 1,472.60, with only 1.88 billion shares changing hands, falling below its 5-day average of 2.2 billion shares.

“What it means for the economy, it really is not that significant”, said Dean Croushore, chairman of the economics department at the University of Richmond in Virginia and a former Fed economist. Exxon’s (XOM.N) 1.6 percent rise provided the biggest boost to the Dow and the S&P 500.

Given the enormous amount of debt that emerging markets have accumulated, even a small rate hike has the potential to cause large shockwaves. The euro dropped to $1.1248 from $1.1309.

S&P said it was lowering the rating to A-plus from AA-minus because weak economic growth makes it less likely that the government can quickly improve the nation’s fiscal health.

On Tuesday, the CBOE Volatility index.VIX – popularly known as the “fear index” – closed above 22 for the 17th consecutive day, the longest it has lingered above that level in almost four years.

Spot gold eased 0.1 per cent to $1,103.95 an ounce by 0037 GMT (6:07 a.m.in India).

Silver prices were up 3.4 percent at $14.88. Brent crude, a benchmark for many worldwide types of oil imported into the US, added 10 cents to $48.63 a barrel.