The bond market is starting to give the stock market agita, and focus could remain on interest rates Wednesday as traders try to handicap the Fed’s next move.
A report from the San Francisco Fed staff, released Monday, injected an air of nervous into the Treasury market. The study said investors’ expectations for rate hikes lag those of the Fed.
On top of that, the Treasury market has been full of talk that the Fed could tweak the language in its statement, removing a key phrase that has reassured markets it would hold rates lower for a long time to come.
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