Iain Stealey, chief investment officer of fixed income international at Morgan Asset Management, said that if the Federal Reserve decides to keep interest rates unchanged on Wednesday local time, it may “surprise” the market. Currently, traders are almost certain that the Federal Reserve will raise interest rates, so if left on hold, it may trigger a sell-off of US Treasury bonds. In an interview on Wednesday, Stealey said, “If they don't raise interest rates, it will obviously have a huge impact on the market. I don't think the long-term yield curve will like this outcome.” Currently, the swap market shows that the probability that the Federal Reserve will raise interest rates on Wednesday is 95%, and the expectation of a second rate hike before the end of the year has been factored in.

Iain Stealey, chief investment officer of fixed income international at Morgan Asset Management, said that if the Federal Reserve decides to keep interest rates unchanged on Wednesday local time, it may “surprise” the market. Currently, traders are almost certain that the Federal Reserve will raise interest rates, so if left on hold, it may trigger a sell-off of US Treasury bonds. In an interview on Wednesday, Stealey said, “If they don't raise interest rates, it will obviously have a huge impact on the market. I don't think the long-term yield curve will like this outcome.” Currently, the swap market shows that the probability that the Federal Reserve will raise interest rates on Wednesday is 95%, and the expectation of a second rate hike before the end of the year has been factored in.