) -- The

Federal Reserve's

decision on interest rate policy, as well as the latest read on consumer price inflation, will be in the spotlight during Wednesday's trading session, with traders set to pay close attention to the way the central bank words its accompanying statement.

The Federal Open Market Committee

will end its two-day meeting on interest rates Wednesday, with a decision expected at 2:15 p.m. EST.

While economists do not expect the Fed will raise interest rates from the target range of zero to 0.25%, they will watch to see if the Fed includes the terms "exceptionally low" and "extended period" in its accompanying statement. That's because the most recent

nonfarm payrolls report

was much stronger than many had anticipated, while inflation has begun to tick higher.

On Tuesday, the Labor Department said its producer price index rose 1.8% in November, much hotter than the 0.8% rise economists had predicted. The core number, which excludes food and energy, ticked 0.5% higher, more than doubling expectations.

Wednesday will bring the Labor Department's consumer price index at 8:30 a.m. EST, well before the Fed's decision is released. The report will give traders an indication if inflation has trickled down from the wholesale level to the consumer. Currently, economists are looking for the headline number to rise 0.4% in November and for the core number to climb 0.1%.

At the same time, the Census Bureau will release the November reading on housing starts and building permits, which should jump to 578,000 and 570,000 from 529,000 and 552,000 in October, respectively.

Investors will also be focusing on the Energy Department's weekly inventory report, due at 10:30 a.m. EST. Crude oil inventories are likely to have fallen by 2 million barrels last week, a


survey of analysts shows.

Turning to company-specific news, traders will likely still be digesting earnings from

Adobe Systems

(ADBE) - Get Report

, due for release after the end of trading Tuesday.

Joy Global




(PAYX) - Get Report



(HOV) - Get Report

are scheduled to report quarterly results Wednesday.



(HON) - Get Report

will offer its 2010 announcement during a conference call at 9 a.m. EST.

-- Written by Robert Holmes in Boston


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