Asian shares were mixed on Wednesday, while oil prices slid to six-month lows as traders waited for the year's final policy decision from the Federal Reserve and clues on whether the central bank will cut rates next year.
Brent bottomed at $72.57 a barrel, its lowest since late June, while U.S. crude slid to $68.01 a barrel on concerns of softening demand and oversupply.
The Fed takes centre stage on Wednesday, where it is due to announce its rate decision at the conclusion of its two-day policy meeting.
Market expectations are for policymakers to keep rates on hold , unfazed by a reading on U.S. inflation that came in largely in line with consensus.
That leaves the focus on Powell's press conference and the Fed's dot plot of future policy trajectory.
"The December FOMC is poised to be short on action, given the consensus for no rate hike, but may nevertheless be big on drama," said Vishnu Varathan, head of economics and strategy at Mizuho Bank.
"In particular, as a refreshed dot plot accompanied by revisions to the summary of economic projections offer ample fodder to interpret the propensity for a Fed pivot... as well as confidence around a soft landing.
"But the growing danger is that the Fed's inclination may be to calibrate expectations for a pivot."
Nonetheless, investors continue to bet that the Fed is all but certain to begin easing monetary policy in 2024, and are pricing in a 75% chance the first cut could come as early as May, according to the CME FedWatch tool.
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Ahead of the decision, markets stayed on guard, sending MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) falling 0.7%.
Japan's Nikkei (.N225) gained 0.25%, while EUROSTOXX 50 futures slipped 0.02%. FTSE futures were little changed.
S&P 500 futures meanwhile rose 0.1% while Nasdaq futures bounced 0.17%, after Wall Street on Tuesday notched fresh 2023 highs.
U.S. bond yields hovered near their recent lows, with the two-year Treasury yield last at 4.7327%, having earlier in December hit a roughly six-month trough of 4.5400%.
