"Futures are trading modestly lower as the big day has finally arrived: the Federal Reserve will wrap up its last meeting of 2025, and the odds still heavily favor a 25-basis-point rate hike. The worry hanging over traders is that many fear a "hawkish rate cut." Where they do cut 25 basis points, but the commentary from Chairman Powell could be hawkish, and future cuts could be moved to the sidelines."
"Yields were mixed across the Treasury curve on Tuesday as bond traders, like their equity counterparts, are laser-focused on the Federal Reserve interest rate decision and the commentary that will follow. One datapoint that will be scrutinized is the JOLTS data, which showed more job openings than were expected. In addition, a $58 billion auction of 3-year notes saw strong demand, with yields clearing lower than expected, indicating good appetite for shorter-term debt."
Markets expect the Federal Reserve to raise interest rates by 25 basis points, while traders worry that a future 25bp cut could be accompanied by hawkish commentary that delays additional easing. Major indices closed mixed: the Dow fell 0.38% to 47,560, the S&P 500 was flat at 6,840, and the Nasdaq rose 0.13% to 23,576. Treasury yields were mixed as JOLTS showed more job openings than expected and a $58 billion 3-year note auction attracted strong demand; the 30-year yield was 4.81% and the 10-year 4.19%. Oil and gas prices declined amid ample supply and Iraq restoring West Qurna 2 output; Brent traded at $62.05, WTI at $58.35, and natural gas fell to $4.56, down 7.21%.
Read at 24/7 Wall St.
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