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Mohamed A. El-Erian

What the Fed Will Do and Why

The U.S. central bank's signal to markets won't be clear.
Sealing the deal on higher rates.

Sealing the deal on higher rates.

Photographer: Mandel Ngan/AFP/Getty Images

After reacting this week to the beginning of the European Central Bank's quantitative easing program, markets are shifting their attention to the U.S. Federal Open Market Committee meetings on Tuesday and Wednesday.

Yet unlike the ECB’s QE program that is bolstering both stock and bond prices in Europe, the Fed isn't likely to send a clear signal. Instead, it will probably make markets even more aware of the contradictory influences exerted by a strong U.S. recovery and the prospect of interest rate increases by September, providing further evidence of a larger economic and monetary policy divergence between the U.S. and most other nations.