Remember 2015?  The Fed spent the whole year talking about hiking rates for the first after spending years at 0% and ultimately didn't get around to it until December.  But perhaps the most interesting phrase in any of the year's Fed announcements was seen in the October Announcement.  It was as follows:

"In determining whether it will be appropriate to raise the target range at its next meeting,"

This was the first time the Fed had "called its shot" since 1999, and it threw bond markets for a loop.  Granted, things are a bit different this time around.  Recent Fed speeches have done more to hearken the balance sheet reduction plan as opposed to rate hikes.  In fact, they've all but guaranteed that we'll only see 1 more hike in 2017, at the most (but reserve the right to change their mind if inflation data picks up).

Markets are confident that the September meeting will mark the beginning of the balance sheet reduction plan.  And today's meeting provides the Fed an opportunity to call that shot in the same sort of way they did with the 2015 rate hike.  I don't imagine we'll see as overt a reference this time around, but investors will certainly be looking to see if any verbiage changes could be construed as such a hint.  If so, it's likely worth some additional bond market weakness.

The closest major pivot points for bonds are 2.40% overhead and 2.305%, as seen in the chart below (2.285% is next up if 2.305% breaks).  

2017-7-26 open