Bond Market Update

Gains Maintained As FOMC Looms

• U.S. Treasuries trade just below highs that were notched about 90 minutes ago with the belly showing some strength ahead of the FOMC decision at 14:00 ET. The market is pretty confident that a 25-basis point rate hike will be announced, evidenced by the 28-basis point increase in the 2-yr yield in September alone, but investors will be curious to see the latest economic projections. Investors will watch the dot plot to see if policymakers are expecting a higher rate path going forward. Equities are hanging onto modest gains with the S&P 500 (+0.3%) sitting right below its 50-day moving average (7613).
• Yield Check:
  • 2-yr: -4 bps to 4.62%
  • 3-yr: -5 bps to 4.71%
  • 5-yr: -5 bps to 4.78%
  • 10-yr: -4 bps to 4.96%
  • 30-yr: -2 bps to 5.34%