© Reuters. The front facade of the NYSE is seen in New York

By Shashank Nayar and Medha Singh

(Reuters) – Futures tied to the and the Dow were subdued on Wednesday as investors held their breath ahead of the Federal Reserve’s policy statement which could provide hints on whether the central bank would be forced to raise interest rates sooner than expected.

The S&P 500 and the Dow started off the week at all-time closing highs while the Nasdaq has recovered more than half of its losses since confirming a correction last week on the back of latest round of fiscal stimulus and vaccinations.

Wall Street’s major indexes were derailed from their peaks last month as record public borrowings stoked inflation fears, leading to a rapid spike in long-duration Treasury yields.

The Fed is betting the economy can take off from the COVID-19 pandemic without generating excessive inflation, and has vowed to keep interest rates at rock-bottom levels till the labor market reaches pre-pandemic levels.

Policymakers are expected to issue a blowout GDP forecast for 2021 at the end of a two-day meeting on Wednesday, at 2 p.m. ET (1800 GMT) which will be followed by Fed Chair Jerome Powell’s news conference shortly after.

“There is a decent chance that the rates forecasts from the 18 members committee could start focusing on a 2023 hike which would be quite a surprise, that Chairman Powell would then try to walk back in his speech,” said Sebastien Galy, macro strategist at Nordea Asset Management.

The benchmark 10-year yield ticked up to a new 13-month high of 1.646% ahead of the policy decision, denting demand for some high-growth technology stocks.

Apple Inc (NASDAQ:), Facebook Inc (NASDAQ:), Netflix Inc (NASDAQ:) and Microsoft Corp (NASDAQ:) slipped between 0.2% and 0.6% in premarket trading.

At 06:37 a.m. ET, Dow E-minis were up 33 points, or 0.09%, S&P 500 E-minis were down 1 point, or 0.03% and E-minis were down 28 points, or 0.21%.

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