While it is not expected to take any rate action, the Fed does have the opportunity to further soothe markets with its post-meeting statement Wednesday. There is no news briefing, nor will there be any updated economic or interest rate forecasts.
"We don't see the economy as being soft enough to push the Fed to the sidelines, but the currently tight conditions in financial markets could lead policymakers to hesitate. However, we see the possibility that investors and traders are overreacting to the potential for global slowdown," said chief economist at Daiwa Capital Markets America, Michael Moran.
"If so, financial markets will settle, just as they did after September, and the Fed will follow through with its intentions to tighten policy. Thus, we continue to look for three additional interest rate hikes this year, with the Fed's next move occurring in April," he added.
There are no major data releases due on Monday, with the most notable U.S. data release this week being the first estimate of fourth-quarter gross domestic product on Friday.
Crude oil fell on continuing oversupply woes and profit-taking on Monday, reversing from early gains that followed a surge at the end of last week.
Brent lost $2.17 to $30.01 a barrel on Monday. U.S. crude declined $2.49 to $29.69 a barrel.