PARIS: European shares were muted on Wednesday ahead of a widely anticipated interest rate hike and accompanying commentary from the US Federal Reserve that would provide more clues on the central bank’s monetary tightening plans.

The pan-European STOXX 600 cut early gains and was flat at the close.

The Fed is widely expected to raise its benchmark interest rates by 25 basis points to 4.50%-4.75% at 2 p.m. ET (1900 GMT).

Investors will also watch Chair Jerome Powell’s news conference for clues on how long interest rates could stay elevated.

“Equity markets aren’t wanting to make any major moves until we’ve heard from the Federal Reserve,” said Giles Coghlan, chief market analyst at HYCM.

“What the market’s oscillating between (is) ‘are we going have a very hawkish Powell who’s going to tackle inflation or can we have a more dovish Powell, who’s more concerned about slowing growth?’” The Fed’s decision will be followed by monetary policy announcements by the European Central Bank and the Bank of England on Thursday, with both likely to raise interest rates by 50 basis points.

The STOXX 600 clocked its biggest January gain since 2015 in the previous session, as a milder winter and China’s reopening brightened the outlook for the euro zone economy.

A survey by S&P Global showed the downturn in euro zone manufacturing activity eased again last month.