The Fed meets today for the last time of 2018, and the market will have the clearest view of the Fed’s plan for next year as Chairman Powell has a conference after the announcement. There is large potential for volatility as some view the Fed continuing the course, while others see an economy showing the first signs of slowing down which could lead to an ease of the rate hikes.
Stocks opened higher on Wednesday as investors patiently await color stemming from the U.S. Central Bank. The FOMC is set to announce its policy decision this afternoon at 2PM EST. Currently, Bloomberg has the odds of a rate hike pegged at 70.8%; however, market attention will be glued to projections and rhetoric in 2019. Many analysts are expecting hikes next year on a contingency basis, breaking away from the steady, predictable increases that were prevalent in 2018. The S&P500 is currently trading at 2,567.26, 0.83% higher.
Treasuries are little changed in the AM as investors avoid major shifts in allocations before a plethora of global central bank policy announcements on Wednesday and Thursday. Both the BOE and BOJ are gearing up to discuss policy on Thursday, while the U.S. Central Bank will report later today. A portion of the UST yield curve remains inverted ahead of the FOMC meeting, with the 2 Yr Note trading higher than both the 3, and 5 Yr. The US 10-YR Note is currently trading at 2.8228%, 0.0053 higher.