Message of the Market

Is the rally in stock index futures suggesting that the Fed will NOT alter its language when it renders its decision on interest rates later today.

That could be the case since the factors that have driven stocks lower in recent days, crashing oil prices, weak European equity markets and currency turmoil are still present this morning, but stocks are up sharply in pre-market trade.

Published reports have suggested, in recent weeks, that the Fed may signal its readiness to start normalizing interest rates in 2015, by removing the phrase "considerable time" from its policy statement. The Fed has been saying that interest rates will remain low for a "considerable time" after the Fed ends its quantitative easing program, which has now been completely wound down.

The removal of that language would, according to conventional wisdom, pave the way for the Fed to lift interest rates when it is firmly convinced the economy is strong enough to handle such a move, as employment, and growth, trends continue their noticeable improvement.

From Russia with Love

Of course, the global economy looks considerably weaker than at the last Fed meeting, Russia, and other emerging markets, are battling collapsing currencies, while Europe, Japan and China are facing slower growth and the threat of deflation.

While I believe the Fed should NOT alter its language, I will wait for confirmation before taking any market-related action, despite the rally this morning.

As subscribers to "Insana's Market Intelligence" were told yesterday, I have taken defensive actions in my portfolio in case the Russian ruble crisis, crashing oil prices and technical weakness in stocks lead to a 1998-style mini-meltdown.

Fed Speak

In addition to the Fed's official statement, to be released this afternoon, Fed chair, Janet Yellen, will hold a news conference explaining the Fed's current thinking.

This could be a critical moment in Fed policy, so it behooves (I love that word) us to wait on the words from the Fed before making any further decisions on the longer-term direction of stocks, bonds and commodities.