Daniel Grizelj
What was support is now most likely resistance, as the S&P 500 rallied back to the 3,900 level in what was a surprisingly strong day for stocks to start the week. This was even more impressive considering that the 10-year Treasury yield rose to a new 11-year high of 3.5%, while the 2-year yield rose to its highest level since 2007 at 3.94%. The bond market now sees the Fed funds rate at approximately 4% over the coming year, according to 2-year yields, which implies another 100 basis points of rate increases following the 75 expected tomorrow. Fed funds futures contracts show the highest probability of a 4.25% rate by the end of this year.
Finviz
The bond market’s outlook and those odds will undoubtedly shift after the Fed’s forward guidance is updated in a new “dot plot,” showing where each member sees rates over time. Chairman Powell will hold his press conference afterwards. I suspect his comments will…
