The risk for markets Wednesday is that the sounds a little more hawkish when it releases minutes from its July meeting.
After big swings in the currency market, traders see the potential for more volatility if the Fed minutes show members favoring a rate hike sooner. The dollar has been soggy of late and sold off Tuesday, amid low expectations that the Fed will hike rates this year, but strategists say the market may have gone too far.
The minutes are due at 2 p.m. EDT and are likely to show a Fed that sees fewer hurdles to an interest rate hike. The Federal Open Market Committee already laid some ground work for a move this year in its post-meeting statement July 27, when it said near-term risks to the economic outlook were diminished.