The Fed's long game is anyone's guess

London(CNN Business) Happy Wednesday. A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here.

Markets think it's a foregone conclusion that the Federal Reserve will announce a quarter point interest rate cut on Wednesday. The big question for traders, then, is what comes after.

Those parsing Chairman Jerome Powell's press conference for clues may be let down. Powell is expected to reiterate the forward guidance he's repeated in the past: That the Fed will "act as appropriate" to sustain the economic expansion. This leaves the possibility of another December rate cut on the table, but offers no assurances.

"This may prove a disappointment for investors looking for the all-clear signal," Joe Brusuelas, chief RSM economist, said in a recent note to clients. "It is highly probable that Powell sticks to his data-dependence position."

About that data: The Conference Board said Tuesday that consumer confidence fell slightly in October, but this wasn't overly concerning. "Confidence levels remain high and there are no indications that consumers will curtail their holiday spending," said Lynn Franco, the Conference Board's senior director of economic indicators.

Such data bolsters the case for the Fed to take a breather. But the first look at US GDP growth between July and September, which arrives Wednesday, could paint a grimmer economic picture.

The Atlanta Fed's GDPNow model estimates an annual growth rate of 1.7% for the quarter, matching the forecast of economists polled by Reuters, my CNN Business colleague Anneken Tappe reports. The New York Fed's Nowcast model estimates growth at a pace of 1.9%.

"With the exception of the fourth quarter of 2018, quarterly GDP growth hasn't been below an annualized rate of 2% for more than three years," Anneken writes.

Watch this space: As of early Wednesday morning, markets were pricing in a 21% chance of another rate cut in December, according to CME Group's FedWatch tool. Let's see if that moves after Powell's remarks this afternoon — and again after the ISM Manufacturing Index and October jobs report arrive on Friday.

Fiat Chrysler still wants to get hitched

Fiat Chrysler (FCAU) couldn't seal a tie-up with Renault (RNLSY). But it didn't sit still for long. Now, the company is in talks to merge with another French carmaker: PSA Group.

The carmakers confirmed in statements Wednesday that they are taking part in "ongoing discussions" over a potential deal. A merger between Fiat Chrysler and PSA Group, the owner of the Peugeot and Citroen car brands, would create a nearly $50 billion company.

Investors like the combination. Fiat Chrysler shares jumped 9% in early trading in Milan, while PSA Group's stock shot up 6% in Paris.

Remember: Developing the cars of the future is expensive, and global sales are falling at the exact time automakers need to be spending more to develop electric and autonomous vehicles.

The pressure is forcing established automakers into arrangements that allow them to shore up revenue while sharing costs. In this case, it could create a massive new player that would compete with traditional companies such as Volkswagen (VLKAF) and GM (GM), as well as newer entrants such as Tesla (TSLA) and Uber (UBER).

The UK is heading for a dramatic election

December 12. That's when the United Kingdom will hold its third general election in four years — and the stakes couldn't be higher. The vote could end the Brexit paralysis, or plunge the country's political system deeper into chaos. No sweat.

Investor insight: Each potential outcome comes with risks for investors, which helps explain why the pound is up just 0.2% against the dollar in early Wednesday trading.

One scenario is another divided parliament and no path forward on Brexit. Or Prime Minister Boris Johnson could wind up emboldened, resurfacing fears of a damaging break with the European Union. The vote could also install a left-wing government led by Labour chief Jeremy Corbyn, which investors worry would mean major structural changes to the UK economy.

"Take nothing for granted in the forthcoming election," Brian Hilliard, chief UK economist at Société Générale, warned clients in a note Tuesday. "Just ask Theresa May."

Up next

Earnings, earnings, earnings. Airbus (EADSF), Volkswagen (VLKAF), General Electric (GE), Molson Coors (TAP) and KFC owner Yum! Brands (YUM) report before US markets open. Apple (AAPL), Facebook (FB), Lyft (LYFT) and Starbucks (SBUX) will follow after the close.

Also today:

• The first look at US GDP growth for the third quarter arrives at 8:30 a.m. ET.
• The Federal Reserve's rate decision goes live at 2 p.m. ET, to be followed by Chair Jerome Powell's press conference.
• Boeing CEO Dennis Muilenburg continues his Congressional testimony before the House Transportation and Infrastructure Committee.

Coming tomorrow: How hard is the global economic slowdown hitting Europe? Third quarter GDP data will provide some answers.