✏️The Treasury market is roaring🗽

We are seeing a dramatic rise in the 10-year US Treasury yield for the past month on the backdrop of the uncertainty revolving around the aggressiveness of the Fed in pushing short-term interest rates. 

Traders signal that the Fed will be in a hawkish mood. After all, in the history of inflation, the Fed is rarely in the relief mode. During the early trading session, we saw the 10-year yield rising to 3.58%, hitting a high note since April 2011. 

💸All eyes are on FOMC meeting outcome🔭

Market participants prepare themselves for the big moment when the Fed announces the rate hike. More importantly, the biggest jackpot lies in what the Fed hints at the Nov meeting. There are two layers of concerns. 

First, investors are worried about the peak of interest rates. They expect the rate to go perhaps to as high as 5% from the initial low of just above 3%. 

The next headache lies in the concern that the Fed will keep the elevated rate consistent for longer than expected. That is, the pivot will not happen. This will hit the expensive growth stocks such as the Nasdaq index much more than a more diversified index, the S&P 500. 

It could ripple into the financial market and the constant tightening leading to a recession. If that holds, economically sensitive stocks such as the Dow will start to break loose, more so than companies in the Nasdaq. This is precisely what unfolds on Tuesday. While the Nasdaq tumbled 1.1%, the fall was more severe for the Dow. 

Indeed, the Dow is reaching a critical junction, the 30,000 mark. 

🎯What’s on the menu today?🔦

At 10 pm, we will receive the Existing Home Sales figure, which is likely to moderate to 4.81M from 4.70M. 

Crude Oil Inventories data will also be announced at 10.30 pm, which we expect to remain reasonably stable at 2.16M.

The FOMC economic projections and interest rate decision will arrive at 2 am. This is followed by the FOMC press conference, where Uncle Powell will need to communicate the possible path ahead clearly.