The S&P 500 and Nasdaq Composite are up today as investor sentiment remains high going into the conclusion of the Federal Reserve’s December Federal Open Market Committee (FOMC) meeting. Inflation data reported yesterday came in rather benign, which is also sending stocks up and making investors hopeful that the central bank will cut rates in 2024.

Providing investors with some insight into Fed members’ thinking, the Fed’s economic projections will be released later today. Chairman Jerome Powell will hold a press conference today as well. Both events are slated to occur this afternoon.

Benign Inflation Data

For the November Consumer Price Index (CPI), overall prices rose only 0.1% over the last month. Meanwhile core prices, which exclude the volatile food and energy categories, increased 0.3% month-over-month. This data was roughly in-line with economists’ average estimates, as their mean outlook had called for a 0% increase in overall prices and a 0.3% gain in core prices.

Of course, the CPI did rise 3.1% year-over-year (YOY), which is still well above the Fed’s official target of 2%. However, this increase was below the 3.2% gain recorded for October. Moving forward, the Fed is widely expected to refrain from raising rates again for the foreseeable future.

What to Expect From the Fed

Most investors think that the Fed is now finished with raising rates. Still, any indication within the Fed’s statement or from Powell today that the central bank is indeed done raising rates could send stocks up, as the Fed has not yet made an official statement saying as much.

Investors will also be examining the economic projections this afternoon — colloquially known as the “dot plots” — for indications that the Federal Reserve has lowered its inflation forecasts. That’s because the central bank is more likely to lower rates if it’s less worried about inflation.

All told, any suggestion from Powell today that rate cuts may be considered soon will likely send stocks up tremendously. However, since the Fed Chair denied that rate cuts were being weighed back in early November, such a scenario is unlikely to unfold.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.