Treasuries keep a steadier footing so far on Fed week
10-year yields are back under 1.60% as calmer tones continue to reverberate across the market so far on Fed week. It is all building up towards the FOMC meeting tomorrow and while the market has a sense of what the Fed might do, nothing is certain.
Besides the language on policy, the infamous dot plots and SLR decision will be the key things to watch come tomorrow. As such, expect things to keep more quiet as volumes should stay on the lighter side until we get over the Fed hump tomorrow.
In the bigger picture, the path of least resistance for Treasuries appears to be lower i.e. higher yields. But the Fed plays a crucial role in setting the pace and that begins tomorrow.
