WASHINGTON (TheStreet) -- The Federal Open Market Committee's rate decision announcement Wednesday afternoon is unlikely to yield any surprises because Europe and some recent macroeconomic releases have given U.S. policymakers plenty of reasons to be conservative regarding growth expectations.

Despite the widespread belief that the FOMC will leave the target range for the federal funds rate at the low 0% to 0.25% level, where it has been since Dec. 16, 2009, the release is still likely to be the most highly anticipated macroeconomic event this week.

"The key will be the language that the FOMC uses in its communiqué," said Avalon Partners Chief Market Economist Peter Cardillo. He believes the statement might take a slightly more optimistic tone regarding economic activity even though he doesn't expect a rate increase until the middle of 2011.

Conversely, UBS Economist Maury Harris said he can't rule out the possibility that the Fed will water down the tone of its economic assessment since recent data hasn't been as strong as expected.

"Data since the last FOMC meeting has likely increased the level of concern within the Federal Reserve of a further slowing of growth and an increased risk of deflation," Harris said. He expects the FOMC will leave the target rate unchanged until January 2011.

"Although our expectation of no change in the language of the statement is based, in part, on the premise that concerns about market stability and the potential economic impact of the European crisis has reduced the Fed's appetite to tighten policy in the near term, we cannot rule out that the Fed is sufficiently worried to take the additional step of reconsidering the tone of their assessment of the economic outlook," Harris said.

In the period since the FOMC's last policy-setting meeting at the end of April, market confidence has been significantly rattled by Europe's sovereign debt crisis. Underscoring concerns about economic recovery was disappointing private sector

job growth in May followed by last week's

unexpected jump in initial weekly jobless claims.

Additionally, May reports on

wholesale and

consumer prices both supported the Fed's view that inflationary pressures will remain muted in the near term.

Separately, Joseph LaVorgna, Deutsche Bank's chief U.S. economist also doesn't foresee many changes to the Fed's statement. He believes the committee will retain the "extended period" language despite Kansas City Fed President

Thomas Hoenig's repeated opposition to the continued use of the phrase.

"We doubt the Fed will upgrade its growth assessment in light of events in Europe, which likely pose downside risks to the economy in the minds of policymakers," LaVorgna said, adding that European events are unlikely to have a significant impact on the U.S. economy even if the dollar strengthens further.

"The rally in both mortgage and corporate borrowing rates in addition to lower energy costs associated with the stronger dollar should provide the U.S. economy with an added jolt. Furthermore, lower interest rates should provide an added boost to the equity market, which is extremely inexpensive based on our strategists' earnings estimates," LaVorgna said, pointing to firm estimates suggesting that the stock market is selling at 13 times 2010 estimated earnings and slightly more than 11 times 2011 earnings.

The FOMC will release its rate decision statement at 2:15 p.m. ET Wednesday.

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Written by Melinda Peer in New York

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