In the day just passed, the bond market finally got a chance to sink its teeth into the much-anticipated Fed announcement/forecasts/press conference.  Traders were hoping to get a read on whether the Fed rate cut cycle is being treated like a fine-tuning adjustment or the beginning of a sustained shift.  Of course there was no way for the Fed to know that, let alone communicate it.  As we expected, Powell basically said "it depends."  Bonds were a bit let down by that, and the somewhat more hawkish Fed funds forecasts.  Yields retreated from their anticipatory lows of roughly 1.75%, but nonetheless managed to stay in positive territory on the day.

In the day ahead, bonds will battle with the same 1.75% level after an overnight rally.  1.75% or thereabouts has come into play several times since the big rally at the beginning of august.  Most of the activity around those levels has come in higher volume.  This is one of those times when technical analysis--even if only with respect to "pivot points"--is most useful.  Simply put, yesterday was highly charged and 1.75% (technically 1.744%) was the best we could manage.  Yields then went higher after the key event, so it stands to reason that a move back below 1.75% would be significant.

20190909 open