Federal Reserve

Will the Fed throw emerging markets a bone?

Fed Preview: Emerging market impact

Emerging market investors will watch the outcome of the Federal Reserve's policy meeting on Wednesday closely in hopes the central bank might throw them a bone, but analysts told CNBC they will most likely be disappointed.

Emerging market currencies suffered an ugly selloff last week, after a sharp plunge in the Argentine peso, weak Chinese economic data and continued worries over further tapering by the Fed triggered a broader selloff across the region.

But investors banking on a helping hand from the Fed could be left empty handed, analysts said.

(Read more: Who pulled the trigger on emerging markets?)

"It's pretty unlikely to be honest," said Robert Prior-Wandesforde, director of Asian economics research at Credit Suisse. "The history of the Fed is that they focus very squarely on what's going on in their own economy, and they'll only say anything if what's happening elsewhere is seen to be impinging on their economy."

"At this stage I wouldn't have thought they'd be too concerned that what's happening in Latin America or Turkey would have a major knock on implications on growth, inflation or employment in the U.S.," he added.

(Read More: Roach on US recovery: 'Keep the champagne on ice')

Emerging markets have been one of the chief beneficiaries from the plethora of cheap money the U.S. central bank has flooded markets with since 2008.

As a result, ever since U.S. central bankers first started talk of cutting back that money flow mid-last year, emerging markets with larger current account deficits have proven particularly vulnerable, namely India, Indonesia, Turkey, Brazil, South Africa and Argentina.

But many analysts believe that weakness in these problem countries will not be significant enough to prompt any action from the Fed.

There are three ways in which the Fed might view the emerging market rout: a potential change to its medium-term forecast, the possibility of considering the fallout as a systemic risk to the U.S. economy or the perception of the crisis as a broader macro-fundamental problem in the region.

(Read More: Are rate hikes on the cards for emerging markets?)

However, it was more likely that the Fed would not take any of these three courses of action, because the impact of weakness in these countries' economies would be deemed too minor to have a sizable impact on the U.S. economy.

Ben Bernanke and Janet Yellen during a Fed meeting in December 2013.
Andrew Harrer | Bloomberg | Getty Images

But if no reference is made at all to the recent weakness in the emerging markets at the Fed meeting, that could come as a blow to emerging market investors, according to Steven Englander, head of G10 FX strategy at Citigroup at Citi, suggesting that the selloff could deepen as a result.

"This [consensus expectations] is unlikely to be enough to reassure investors unless the FOMC (federal open market committee) sends a clear signal that it sees the turmoil in EM and asset markets as a risk to the U.S. recovery," said Englander.

(Read More: Are emerging markets on the brink of another crisis?)

Consensus expectations are for the Fed to announce another $10 billion tapering at the next meeting and reiterate forward guidance of ultra-low rates for a long period.

However, on the flip side, Englander added that emerging market investors' biggest fear would be an increase in the size of the taper, a hawkish outcome that is unlikely to occur, if the majority of analysts have got it right.

Emerging markets account for a fair chunk of U.S. export demand. Latin America accounts for a fifth, for example, which some could argue makes the U.S. susceptible to any weakness in emerging markets.

(Read More: Did the Fed sink the emerging markets?)

But Credit Suisse's Prior Wandesforde pointed out that in the breakdown of U.S. gross domestic product, exports do not account for a significant proportion, reducing the potential risk.

"The impact on exports [from reduced EM demand] could be meaningful, but the impact on GDP is unlikely to be meaningful at this stage," he added.

Steve Liesman, CNBC's senior economic reporter, contributed to the reporting of this article.

By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie