"How do they look at 2017? How do they view the risks given the new administration and what does that mean for policy response? That was the biggest question I had coming out of the last meeting," Simons said.
Investors may also be reading the tea leaves for what the Fed says on inflation, after Tuesday's ISM manufacturing survey for December was stronger than expected and showed a surprisingly large jump in prices paid. ISM rose to 54.7 in December, its highest level since 2014, but prices rose sharply to 65.5, the highest since June 2011.
Simons said the 11 point jump in prices signals inflation is on the nearby horizon. The fact that manufacturers normally raise prices in the first quarter or second quarter made the number even more surprising, and an even stronger signal that inflation could be starting to rise, he said.
"…Prices are starting to go up. That's had an impact going up the chain," he said. "I think that was the message we go from that today."
Simons and others said the report showed solid signs of recovery in manufacturing. "This plays into the global 'reflation' theme with investors pointing to rising input prices in China and elsewhere as signaling a potential return to higher inflation rates. We think average hourly earnings — released Friday — may also fit this narrative as we are forecasting above consensus 0.4 percent MoM [month-over-month] growth," noted Citigroup economists.
Besides the Fed minutes, there will be December vehicle sales in the morning Wednesday. The annualized selling rate is expected to be around a strong 17.5 million. There are also mortgage applications at 7 a.m. EDT.
Stocks on Tuesday closed higher, with the Dow up 118 at 19,881, and the S&P 500 rose 19 to 2,257. Art Cashin, director of floor operations at UBS said the market gained at the end of the day, in part on large orders to buy at the close.
Stocks slipped back from highs earlier after Ford Motor said it changed plans to build a plant in Mexico. The company said it was a business decision, as the small cars it was going to build are out of favor. Instead it is reinvesting in a Michigan plant. Ford stock closed up more than 3.7 percent, but Cashin said it took the wind out of transports that rely on Mexican trade, like Kansas City Southern.
U.S. oil futures, which had been higher earlier, sold off and ended down 2.6 percent at $52.33 on a stronger dollar. Cashin said the stock market was also softer earlier in the day due to the move in crude.
"It was mostly oil, but some of it was the Ford Motor Co acquiescing, and that had people worried about global trade. The transports went negative as soon as that came out. But then you got bailed out at the end because there was big market on close buyers," he said.
Cashin said the market now is watching for signs of what Trump can get done on taxes and stimulus, because companies will hold off on plans until there are more signs that he will have success getting his plans adopted.
Greg Valliere, chief global strategist at Horizon Investments, said he believes the changes will go through, particularly tax reform, but he said the electorate is impatient and wants to see immediate action.
"The 'sugar high' stock market rally after the election was entirely warranted because there's a good prospect of stronger GDP growth in the next two years — stimulated by tax reform and reduced regulations. But the legislative process is often glacial: This will not be a 1,000-mile sprint, it will be one step at a time, starting at noon today," wrote Valliere in a note.