- Fed funds futures markets see a probability of more than 90% that the Fed will increase its benchmark interest rate by 25 basis points to 2%-2.25%, which would be its highest level since 2008.
- What to watch: the dot plot that illustrates the FOMC's expectations for interest rate hikes next year; whether there's mention of trade disputes affecting economic growth; and indications of inflation amid a tight labor market.
- Investors now expect two more rate increases in 2018 after a fourth hike in December.
- Also, look for any change in the monetary policy language that the "stance of monetary policy remains accommodative" and outlook risks "appear roughly balanced."
- 10-year U.S. Treasury note yield is up 0.7 basis points to 3.095% in late trading after reaching an intraday high of 3.115%. The more Fed-sensitive 2-year U.S. Treasury yield rises 1.4 bps to 2.839%.
- Previously: Fed's Brainard unconcerned with yield curve (Sept. 12)
- ETFs: PLW, GOVT, EGF, TAPR, FIBR, USTB
- Now read: Processing Powell's Rout
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