Several US central bankers have recently said that they are expecting the changes, including the estimated 1.5 trillion Dollars decreases in corporate and physical taxes, support the economy, increasing the costs of business and households.
The US Federal Reserve on Wednesday kept interest rates unchanged, but said inflation likely would rise this year, bolstering expectations borrowing costs would continue to climb under incoming central bank boss Jerome Powell. The Fed said Mr. Powell will begin his term as FOMC chairman on Saturday and is scheduled to be sworn in as chairman of the Fed board of governors on Monday. "They do want to at least confirm the market's expectations for a March rate hike", said Tom Simons, chief money market economist at Jefferies.
The U.S. economy is strong enough to absorb more rate hikes, based on the Fed's latest assessment.
Fed officials have pencilled in three moves this year and investors see more than a 90 per cent chance that they would hike it at their next meeting of the Federal Open Market Committee on March 20-21.
The Fed will release a statement following its two-day meeting at 2 p.m. ET Wednesday.
The FOMC upgraded its outlook for inflation on a 12-month basis saying that they expected it to increase and stabilise around the 2% level this year.
"Earnings are going very well, it demonstrates that the dramatic cut in corporate taxes are helping every one in terms of profitability", said Stephen Massocca, Managing Director at Wedbush Securities in San Francisco.
Besides the Fed, investors also looked ahead to key US economic data due later in the session for fresh clues on the likely trajectory of monetary policy in the months ahead.
The Fed's policy statement repeated that officials see the near-term economic risks as "roughly balanced", meaning the prospects of growth that is either stronger than anticipated or weaker than anticipated are about the same.
This is the first meeting of the committee in 2018 and market participants focus on the Fed's decision on interest rates. "If the market expectation of the Fed Funds rate continues to rise beyond ~2.5%, then the higher interest rate cavalry may finally come to the dollar's rescue".
Janet Yellen may be leaving the Federal Reserve, but her new position as a distinguished fellow at the Brookings Institution will ensure she remains highly active in the debate over USA interest rate policy.
The U.S. central bank forecasts three rate hikes this year, including one at its March policy meeting.
Policy makers said they would continue to "carefully monitor" inflation as the Fed tries to meet its 2% target - the level it considers healthy for the US economy.
January sales of US Mint American Eagle gold coins fell 50 percent from the same month a year earlier, the slowest January sales in 10 years, and January silver coin sales fell to the lowest since 2009, government data showed on Wednesday. However, neither of them get votes this year, due to the Fed's rotational system.