Speculation is intensifying ahead of the US Federal Reserve's important policy meeting that a meaningful change in the language used to discuss rates could rattle financial markets and lead to a further sell down of Australian dollars. Many investment experts are anticipating a change in the language used by the members of the Federal Open Market Committee (FOMC) meeting, and the removal of two words "considerable time", which have been used to suggest that lower rates are needed for longer yet. QIC managing director of global liquid strategies Susan Buckley said with October the expected end date for the Fed's $US4 trillion stimulus injection, forward guidance released in the FOMC's statement on near zero per cent interest rates is likely to change. "A probable outcome is that the FOMC moves from calendar based guidance – and dropping 'considerable time' language - to adopt a substantially more date dependent approach; at the same time, at her press conference following the meeting, Janet Yellen will most likely emphasise that a tightening is not imminent." Ms Buckley added that the Fed is likely to be conscious of the potential to shock financial markets and that it will try to avoid a repeat of the taper tantrum in 2013, where US 10 year bond yields sold off more than 100 basis points over a reasonably short period. The Australian dollar lost about 4 cents last week as the US greenback strengthened on growing expectations of higher rates in the US from 2015, and the likelihood of lower rates and further stimulus being required in Europe and Japan. Westpac senior currency strategist Sean Callow agreed that the market is looking to see whether Fed repeats the phase about there being a "considerable time" before raising rates. "But there have been Fed officials in previous weeks suggesting that they might dump that language," he said. The Wall Street Journal's well connected reporter Jon Hilsenrath said in a webcast that he doubts the Fed will make a major change to the language used in its policy statement. The US dollar fell soon after his comments, putting an end to its recent rally. The Australian dollar edged higher and is up 0.68 per cent to US90.88 on Wednesday morning. But Win Thin, a strategist at Brown Brothers Harriman told the Wall Street Journal that even if the Fed does not alter its language on rates, the US dollar is still likely to move higher as investors become more confident in the US economic recovery. Bond markets have also been reacting to expectations of higher rates with yields on short dated debt rising. "Given moves last week, the market is now priced for 'lift-off' in the Federal Funds rate from mid 2015," said Ms Buckley. "Heading into the FOMC, markets have started to reprice expectations for this FOMC meeting: for example, December 2017 Eurodollar yields are up over 20 basis points on the week to 2.95 per cent," said Ms Buckley. She added that the extent of ongoing market moves will depend on the degree of shift in FOMC language: any change to or dropping of the "considerable time" language, and or the dialling back the description of "significant underutilisation" in the US labour market, would also propel short end yields higher. "Risk and reward still favours being underweight the 3-4 year sector of the US yield curve," she said.