All Eyes on Fed, Housing, Biden Meets the 'Killer:' 3 Things to Watch

© Reuters.

By Christiana Sciaudone

AiVIF.com -- U.S. stocks spent almost the entire day in the red, with a drop in retail sales and an uptick in producer prices weighing on sentiment a day ahead of the Federal Reserve rate decision.

The Fed's regular meeting began today, and the central bank is expected to announce unchanged interest rates and monthly bond purchases on Wednesday. But what we're all really looking for is any evidence of the bank's thinking on inflation and possible bond-buying tapering.

Data earlier today showed that wholesale inflation jumped to record levels, a week after consumer prices rose to their highest level since 2008. But is it transitory?? Time will tell, my friends.

Oil prices were the highest in three years on expected gasoline demand, despite disappointing demand from the Memorial Day weekend and unofficial start of road trip summer.

In geopolitics, the world's heating up the popcorn to watch President Joe Biden meet Russia's Vladimir Putin. Here's hoping for a civil and peaceful discourse.

Here are three things that could affect markets tomorrow:

1. Decision Day 

The Federal Reserve and Jerome Powell take center stage. Rates are likely to stay put. Everyone will be looking for clues and clarity on when policy makers will begin to discuss tapering, whether the recent bump in inflation is still "transitory" and how the overall recovery is going. Powell takes questions after the decision at 2:00 PM ET (1800 GMT).

2. Housing starts

We get a look at the health of the housing market. Housing starts are expected to increase to 1.63 million in May, up from April's 1.57 million. Building permits and MBA mortgage applications are also due out at 8:30 AM ET.

3. 'Killer' meeting

Biden and Putin will have their first face-to-face meeting in Geneva, Switzerland. It's likely to be awkward, what with Biden having called Putin a "killer" in an interview earlier this year. Expect sanctions and cyber attacks to be high on the list of topics discussed.