We know the Fed will hike tomorrow and we know the "dots" (a reference to the dot-plot the Fed uses to convey it's rate hike expectations) will be the true market mover. Where did that leave us today?
The only data on tap was the Producer Price Index. It was slightly stronger than expected, but expectations called for only a 0.1% increase this month vs a +0.6% increase last month. It passed without much notice.
Stocks and bonds generally huddled together with stock prices moving lower in relative proportion to bond yields. Neither moved much in the bigger picture because both are essentially "in their seats" for tomorrow's big show. It stands to reason, to some extent, that rates would be staging at their upper range boundary, ready for a potential break higher if the Fed increases its rate hike outlook by more than expected.
As for those 'expectations,' we won't know where they are until after the announcement. We can assume that markets are expecting SOME acceleration in the dots. That leaves a small window of opportunity open for bonds to continue to hold this ground. Risks for a move higher are easily as big, if not bigger.
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