FX.co ★ Treasury Yields Little Changed, Fed Eyed

The yield on the US 10-year Treasury note was little changed around 4.43% on Wednesday, as traders avoided taking large positions ahead of the FOMC decision later in the day. The Federal Reserve is widely expected to keep the federal funds rate on hold, but investors will focus closely on forward guidance and the latest economic projections.

The meeting will also be the first chaired by Kevin Warsh, amid uncertainty over whether he will submit a “dot” in the FOMC’s quarterly Summary of Economic Projections, which maps policymakers’ expectations for the future path of interest rates. Markets are currently pricing in at least one 25 bps rate hike this year, though those expectations have eased slightly following reports of an interim US–Iran peace deal. The announcement drove a sharp decline in oil prices and temporarily reduced concerns about inflationary pressures.