Don’t be surprised. Just as the bond market reacted inversely (long term rates have risen substantially since the rate cutting cycle began)to the FED first rate cut back in Sept., there is a good chance something similiar is going to happen beginning with Wednesday’s decision.

The FED is likely to pause (at least for one meeting) and hold rates where they are. I would not be surprised if long term interest rates decline (maybe not in the first hours or even days) after the decision. It may not be a dramatic drop, nor a sustainable one, but long term rates will probably be unchanged or lower by the time the next meeting is held.

The first two paragraphs were written yesterday. Now that I see what is going on in the futures market overnight I would not be surprised if a stock market crash over the next few days forces the FED hand to cut rates Wed., instead of pausing. Either way rates will fall.