Europe's main stock markets deflated at the open on Wednesday as investors awaited the latest interest rate decision from the US Federal Reserve.

London's FTSE 100 index dropped 0.3 percent to 6,950.42 points, Frankfurt's DAX 30 also dipped 0.3 percent to 11,254.47 and the Paris CAC 40 shed 0.5 percent to 4,778.96 compared with Tuesday's close.

The US central bank's two-day monetary policy meeting concludes later Wednesday, with markets expecting another December interest rate hike.

All eyes will be on what Fed boss Janet Yellen says in her post-meeting conference, with investors hoping for clues on future policy in the wake of President-elect Donald Trump's surprise election victory.

"The outcome of today's Federal Reserve meeting is likely even more certain than it was this time last year, with the markets pricing in a rate hike for the past few weeks," Spreadex analyst Connor Campbell told AFP.

"In light of this, investors' focus this evening may be more on any hints for the Fed's path in 2017 than the actions taken today.

"On the other hand, if Yellen and co. do not raise rates, things may well go bananas."

In the second half of 2016, increasingly rosy economy data on the health of the world's largest economy has helped sway reluctant policymakers towards raising rates.

In December last year, the Fed had increased its benchmark federal funds rate for the first time in more than nine years from near zero to a still ultra-low 0.25-0.50 percent.

"The US economy is ready, stock markets are ready, and the Fed has to start its rate-hiking cycle some time -- no time like the present," added City Index analyst Kathleen Brooks.