© Reuters. By Geoffrey Smith Investing.com — The Fed is set to raise interest rates by another 25 basis points, with all eyes on how chair Jerome Powell responds later to speculation on a cut later this year. Inflation in the euro zone slows sharply in January, but the ECB is still expected to hike by 50 basis points on Thursday. Snap slumps after predicting its first-ever drop in quarterly revenue, while Facebook owner Meta – another social media company under pressure from weaker sales growth in recent quarters – reports after the bell. OPEC is expected to leave its output quotas for March unchanged when it meets with Russia and other partners, but there’s another big rise in US inventories. Here’s what you need to know in financial markets on Wednesday, February 1st. 1. Fed decision day The is set to raise the target range for Fed Funds by 25 basis points to 4.50%-4.75% when its two-day policy meeting ends. The is due at 14:00 ET (19:00 GMT), with Chair Jerome Powell’s starting half an hour later. Powell is expected to stress that the central bank is still tightening policy, in contrast to some market participants who have already decided that it will have to reverse course and start cutting rates later this year as the economy stalls. The , which hasn’t made a new low in two weeks after pricing a dovish pivot by the Fed over the turn of the year, is seen by many as at risk of a snapback if Powell talks too bluntly about the need to keep rates high until inflation is dead. 2. ISM manufacturing, JOLTS, and ADP It’s a busy day for US economic data too, with the and the Labor Department’s for December both due at 10:00 ET. Regional surveys from the and Federal Reserve banks this month were both pretty dismal, while the Chicago Fed’s index fell by the most in nearly two years, so it will be a surprise if the ISM index avoids falling further into contraction territory. On the other hand, the JOLTS survey has repeatedly shown vacancies running high at historical levels, making it easier for the swelling ranks of those laid off by tech companies (PayPal (NASDAQ:) added 2,000 job cuts to the list on Tuesday) to find new work and limiting the risk of a recession. ADP will also release its for January at 08:15 ET, while weekly data for and rates are due at 07:00 ET. 3. Stocks set to drift ahead of Fed decision; Snap, Meta in spotlight US stock markets are set to open lower, giving up some of the gains made after a mixed round of earnings on Tuesday. The appetite for big bets ahead of the Fed is likely to be subdued, to say the least. By 07:20 ET, they were down 114 points, or 0.3%, while they were down 0.2%, and were flat. The early focus is likely to be on Snap (NYSE:), which slumped 14% in after-hours trading after predicting its first quarterly drop in revenue. That also weighed in premarket on Pinterest (NYSE:) and Meta Platforms (NASDAQ:), the latter of which reports after the close. T-Mobile (NASDAQ:), Thermo Fisher (NYSE:), and Altria (NYSE:) head the list of early reporters. Mondelez (NASDAQ:) and Advanced Micro Devices (NASDAQ:) are set for stronger openings after more encouraging updates late on Tuesday. Earnings from Big Pharma in Europe overnight have failed to move the dial, with neither Novo Nordisk (NYSE:), Novartis (NYSE:), nor GlaxoSmithKline (NYSE:) ADRs moving much in premarket. 4. Euro zone inflation falls faster than expected – or does it? Inflation in the euro zone is on the retreat too. Or maybe not. Eurostat announced earlier that fell 0.4% in January, bringing the rate down to 8.5%, its lowest since May. There was an even bigger 0.8% decline in . However, figures from Germany – the region’s largest economy – weren’t included due to technical issues at the country’s statistics office, Destatis. The figures haven’t changed expectations for a 50 basis point hike in the at Thursday’s policy meeting, but may make President Christine Lagarde’s guidance a little more nuanced than in December, where she surprised many by signaling a shift upwards in the ECB’s rate path. 5. OPEC+ set to leave quotas unchanged as US production drops The Organization of Petroleum Exporting Countries meets with Russia and other exporters to announce their production targets for March, and it’s set to be a snooze. Newswire reports indicate that there’s no willingness to change course given that most OPEC members’ budgets will balance at current prices (although Russia’s won’t). The US government said on Tuesday that US production fell in November as upstream companies focused on generating cash and paying down debt rather than investing in more drilling. However, more up-to-date information suggests that demand is weakening too: the said crude inventories rose over 6 million barrels last week, taking the cumulative rise over the last five weeks to 35 million barrels. Government data are due at 10:30 ET. By 07:20 ET, futures were up 0.7% at $79.41 a barrel, while was up 0.4% at $85.80.