Fed Chairman Jerome H. Powell also will address questions from the news media afterward.
Traders are expecting the U.S. central bank on Wednesday will cut its policy rate by a quarter of a percentage point.
The Fed is expected to cut this benchmark rate for a second time this year at its meeting this week.
But he also described the 0.25 percentage point cut in the federal funds rate, to a range of 2% to 2.25%, as more of an adjustment in policy rather than the start of a longer-term shift toward easier money. Namely, there is often not enough cash on hand at major Wall Street firms to meet the funding demands of a market trying to absorb record Treasury bond sales needed to cover USA budget deficits.
"While not celebrating inflation in its own right, this does suggest that the economy could be moving out of the environment that has persisted in the wake of the financial crisis", Delwiche said.
Cabana, the Bank of America analyst, blamed the spike in overnight lending rates on the Fed badly underestimating the amount of cash needed to keep the financial system operating smoothly.
With fears low for now of a military retaliation against Iran - accused of being behind the strikes - focus remains on the Fed, which is expected to cut interest rates while its post-meeting statement will be closely followed for clues about future plans.
So has a belief that oil prices will remain elevated, that inflation might finally be reaching the Fed's target level and that the US economy remains sturdy.
Don't expect Powell to tip his hand at the news conference.
Yesterday's mixed USA data has only made investors even more anxious for this evening's highly anticipated Federal Reserve policy decision.
With evidence that market distress would push the federal funds rate above its target early Tuesday, the Fed deployed a maneuver it had not used since the credit crunch to add liquidity into the bank system. Though the dot plot doesn't bind the Fed to any policy, it shows their expectations for the coming months and years. "So they want to give the economy a little more gas".
Central banks around the world have been taking steps to cushion the impact of a prolonged US-China trade war and other geopolitical risks. It had been more than a decade since traders at the central bank jumped into US money markets to add cash.
Two issues may have helped rock the boat even further for a September rate cut in the form of economic numbers. This left the impression that the Fed wasn't necessarily inclined to make further cuts unless its outlook changed appreciably.
Fed policymakers will bring to the meeting their own views of where rates should be by December. "It's going to require Fed action". At the opposite end of the spectrum, James Bullard of the St. Louis Fed has argued for a steep half-point cut to demonstrate the Fed's resolve to fight off a potential recession.
The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S. Most economists think it would be unwise. Bank of America Merrill Lynch predicted the Fed will cut this rate slightly on Wednesday.
Powell has studiously avoided commenting directly on Mr. Trump's attacks, saying tersely that the Fed will keep pursuing its mandates and ignore any outside pressures, even from a president who has branded Powell an "enemy" and the Fed's policymakers as "boneheads".